Child Tax Credit 2019: How to Qualify

child tax credit

As most parents in the USA are now aware, the dependency exemption of $4,050 has been eliminated. Thankfully, though, it is still possible to apply for various tax benefits and credits if you have children or dependents in your care. One of those benefits is the Child Tax Credit. Interested to know if you qualify to receive it? We have got all the facts below:

What Are the Qualifying Criteria? 

There are only four qualifying criteria when it comes to the Child Tax Credit for the tax year of 2019:

  1. You need to have at least one child in your care who is under the age of 17 at the endchild tax credit of the calendar year.
  2. You need to earn less than $400,000 per annum if you are filing jointly with your spouse OR less than $200,000 per annum if you are single and filing individually. 
  3. You need to have provided at least half of the child’s support over the course of the last year.
  4. The child needs to have lived with you for a period of at least six months over the course of the last year (there are some exceptions to this rule).

How Much Is the Child Tax Credit Worth for the Tax Year of 2019? 

You can get up to $2,000 per qualifying dependent child through the Child Tax Credit. Seeing that it is a tax credit rather than a deduction, it reduces your taxes dollar-for-dollar. Furthermore, up to $1,400 of the Child Tax Credit is refundable. In other words, it can take your tax bill right down to zero and you will still have the opportunity to get a refund on anything left over. child tax credit

If you have dependents living with you who are over the age of 17 but that still qualify as dependents (usually as a result of a disability), there is a $500 non-refundable credit that you can obtain via the Child Tax Credit benefit

Be sure to get in touch with the Certified Public Accountants at Georgen Scarborough Associates, PC, if you have any further questions about the Child Tax Credit and how to qualify. 

Having Dependents Has Significant Tax Benefits

child tax credit

Are you aware of the fact that having dependents still has the potential to save you hundreds of dollars in tax, despite the elimination of the dependency exemption of $4,050? It is true! Below, we provide you with some expert insight into the different tax benefits that you can continue to take advantage of going forward. 

Child Tax Credit 

Tax credits are different from tax deductions in that they reduce your taxes dollar-for-dollar. The great news is that while the dependency exemption is no longer in existence, the Child Tax Credit has been

child tax creditdoubled and is now $2,000 in total. You should qualify for this credit if you are the caregiver of one or more children under the age of 17, and if you and your partner’s income threshold is $400,000 (if you are married and filing jointly). If you are single, the income threshold currently sits at $200,000.

Child and Dependent Care Credit 

There is no doubt that working parents will all agree that childcare takes a massive chunk out of their earnings. Luckily, many of these parents are eligible to receive the Child and Dependent Care Credit. The only criteria are that you are employed or actively in search of a job and your child(ren) and/or dependents are under the age of 13child and dependent care credit or are disabled in some way. With this credit, you will also receive a dollar-for-dollar reduction of between 20% to 35% (depending on your annual income) of $3,000 ($1,050) for one child or $6,000 ($2,100) for two or more children.

Earned Income Tax Credit (EITC) 

If you earn less than a certain amount and you have children in your care, you may qualify to receive the Earned Income Tax Credit. For the tax year 2019, the credit ranges from $6,557 for three or more children down to $529 with no children.

earned income tax credit

Would you like more information regarding tax benefits in the USA? Then it is time to book an appointment with the Certified Public Accountants at Georgen Scarborough Associates, PC. Contact us today!

How Income Tax Deductions Work – Standard Vs. Itemized

With the tax season in full swing, filing your tax return should be at the top of your agenda. While this may seem like a daunting prospect, Georgen Scarborough Associates, PC is here to help. With our extensive knowledge in tax, we hope to shed some light on some of the more complex aspects of filing your tax return. In this case, the difference between standard and itemized deductions as well as when to file which.

Read More