The child tax credit, additional child tax credit and the child and dependent care credit are the three main dependent child related credits the IRS offers. If your adjusted gross income or AGI exceeds the limits for each individual tax credit, the IRS will not allow you to take the credit on your federal taxes. Each credit has different limitations that phase out and stop the credit.
Child Tax Credit Limits
The child tax credit stops when your child reaches 17 years of age. To claim this credit, the child must be a citizen, national or legal resident of the United States. You must provide at least half the financial support for the child during the year and the child must live with you for at least half of the year. The maximum amount of this credit $1,000 per qualifying child. The credit amount begins decreasing when your AGI reaches $110,000 if your tax filing status is married filing jointly and $55,000 if your tax filing status is single, head of household or married filing separately. The IRS reduces this credit by $50 for every $1,000 your AGI is over the income limits. If you do not have a federal income tax liability after taking your allowable deductions, credits and exemptions, you do not qualify for the child tax credit.
Additional Child Tax Credit Limits
If you do not have a federal tax liability, you can still qualify for the additional child tax credit. To determine the credit amount, you have to fill out a child tax credit worksheet and then complete IRS Form 8812. You must earn at least $3,000 in income to qualify for this credit if you have up to two children. If you have three or more children and your income is less than $3,000, you may still be eligible to receive the credit and you should speak with a tax advisor to assess your specific situation. The additional child tax credit cannot exceed 15 percent of your income.
Child and Dependent Care Credit Limits
The child and dependent care credit stops when a child reaches 13 years old. If you have qualifying children 12 years old and younger, you can take this credit. The IRS limits the amount of this credit to $3,000 or 35 percent of your dependent care expenses for one child, whichever is less. The IRS limits this credit to $6,000 or 35 percent of your dependent care expenses if you have two or more children. You do not qualify for this credit if you file your taxes as married filing separately. All other tax filing statuses qualify for this credit.
The IRS increases the age limits for child tax credits in certain situations. If you have a child with a permanent disability for whom you have dependent care expenses, the age limit to claim the child and dependent care credit increases to 23 years old. If your child is a full-time student, you can claim child tax credits until he reaches 18 years of age. Finally, you cannot claim the child tax credit or additional child tax credit in either of these situations if your child paid for half of her financial support during the year.
- Tax Credit Resources: Federal Child Tax Credit and Additional Child Tax Credit
- TurboTax: Child Tax Credit
- IRS: Qualifying Child
- Internal Revenue Service. "About Publication 972, Child Tax Credit." Accessed Dec. 13, 2019.
- Internal Revenue Service. "Publication 972 (2018), Child Tax Credit." Accessed Dec. 7, 2019.
- Internal Revenue Service. "Child Tax Credit 3." Accessed Dec. 13, 2019.
- Internal Revenue Service. "Get Ready for Taxes: Here's how the New Tax Law Revised Family Tax Credits." Accessed July 28, 2020.
- Internal Revenue Service. "What's New With the Child Tax Credit After Tax Reform." Accessed Dec. 13, 2019.
- Internal Revenue Service. "2018 Instructions for Schedule 8812 (2018)." Accessed Dec. 7, 2019.
Sue-Lynn Carty has over five years experience as both a freelance writer and editor, and her work has appeared on the websites Work.com and LoveToKnow. Carty holds a Bachelor of Arts degree in business administration, with an emphasis on financial management, from Davenport University.