Are you asking about the child tax credit?
CHILD TAX CREDIT
There was lots of hype in the news about the new $2000 Child Tax Credit when the tax law changed for 2018 and beyond. Unfortunately, some people do not yet understand that it does not mean they will automatically receive $2000 per child just for filing a tax return.
Do not assume your refund will include $2000 per child for child tax credits. It does not work that way. The CTC is used first to reduce your tax liability to zero. After that, there is a refundable portion —up to $1400 — called the Additional Child Tax Credit that is calculated based on the amount of income you earned. You do not necessarily get the maximum amount. You get 15% of the amount of income earned above $2500--UP to the maximum amount possible.
If your child turned 17 in 2019, even on the last day of 2019, you do not get the child tax credit. There are no exceptions to the rule. You can still claim your child as a dependent.
Your child must have a Social Security number to get the CTC.
If your child was born in 2019 you need to say the child lived with you for the WHOLE year.
If your child lived with you for less than half the year you cannot get CTC.
If you did not earn at least $2500 you cannot receive the child tax credit. Beyond that amount the CTC you receive is affected by your tax liability and the amount you earned. You might not get the full $2000 of CTC.
The child tax credit is reduced by $50 for every $1000 of AGI over these limits:
Married filing jointly $400,000 (CTC disappears at $440,000)
Single, Head of Household, Married Filing Separately or qualifying widower $200,000 (CTC disappears at $240,000)
Look at your 2019 tax return to see the credits you received:
Child tax credit line 12a
Additional Child Tax Credit line 17b (schedule 8812)
Credit for Other Dependents line 12a
Same issue here and seeing other posts that the software not calculating the CTC properly.
I have used the IRS tool and says my child qualifies for the CDC when Turbo Tax is only giving depended credit.
Child is not 17, has a SSN and household is not above $400k income limit when filing jointly.
Turbo Tax is only crediting $500 when it should be $2,000.
Yes, you must qualify to claim child tax credit. Below are requirements to claim child tax credit:
- Must have earned income less than your filing threshold ($400,000 for married filing joint).
- Must live with you more than half of the year.
- Must have a qualified dependent under 17 years old
- Must be a US citizen or resident.
- You provided more than one-half of the household support.
Child tax credit is non-refundable. If any part of the credit is disallowed because tax is reduced to zero, you may be able to claim additional tax credit which is refundable.
AGI - $12,000
Less: Standard Deduction $12,000
Taxable Income 0
Based on the above example, your taxable income was zero, But because your tax liability was reduced to zero before the entire child tax credit was used, you may claim Additional Child Tax Credit for a full $2,000/each qualified dependent child.