How Child Tax Credits Work

 Posted on February 16, 2023 in Divorce

Illinois lawmakers have introduced a proposed child tax credit that would give low- and middle-income families a $700 income tax credit for each child under age 17. Eligibility would apply to joint filers who are earning less than $75,000 and single filers earning less than $50,000.

The child tax credit program allows people with children under 17 years of age to claim tax credits of as much as $2,000 per qualifying dependent when they file their tax returns. Up to $1,500 of the credit can be refundable.

Qualifying for a Child Tax Credit

Taxpayers are able claim the child tax credit for their tax year when they file their tax returns. There will be seven tests a person and their qualifying child will need to pass.

1. Age: A child must be under 17 years of age at the end of 2022.

2. Relationship: A child must be a person’s son, daughter, stepchild, foster child, brother, sister, half-brother or half-sister, stepbrother or stepsister, or a descendant of any of these parties.

3. Dependent status: A person must be able to properly claim a child as their dependent. Children cannot file joint tax returns unless they file them to claim refunds of withheld income taxes or estimated taxes paid.

4. Residency: A child needs to have lived with a person for at least half of a year.

5. Financial support: A person must have provided at least half of a child’s support during the past year. 

6. Citizenship: The Internal Revenue Service (IRS) establishes that a child must be a United States citizen, United States national, or United States resident alien, and must have a valid Social Security number.

7. Income: Parents and caregivers claiming a child tax credit cannot exceed certain incomes. Single filers with incomes of less than $50,000 and joint filers with incomes of less than $75,000 are eligible for full child tax credits, but taxpayers with incomes above the threshold means credit amounts are reduced by $24 for each $1,000 of additional income.

Contact a Naperville, IL Family Law Attorney Today

Are you going through a divorce or child custody dispute? You will want to work with a DuPage County family law attorney at Calabrese Associates, P.C. who will be able to take a longer look at your case and recommend the best practices in your case. 

Our Naperville, IL family law attorney understands how stressful matters concerning children can be for divorcing parents. We will be able to work closely with you when you call 630-393-3111 or contact our family law attorney online today to schedule an appointment.

Sources: 

https://getmypaymentil.org/tax-credits/child-tax-credit-ctc/

https://www.cbsnews.com/chicago/news/illinois-child-tax-credit-proposal/