What is the Child Tax Credit and who can claim it?

This credit is $3000 per child ($3600 for ages 5 and under) and is for a qualifying child ONLY. A qualifying child for purposes of the Child Tax Credit is a child who:

• Is claimed as your dependent on your return, and
• Was under age 18 at the end of the tax year, and
• Is (a) your son, daughter, adopted child, stepchild, grandchild; (b) your brother, sister, stepbrother, stepsister, or a descendant of your brother, sister, stepbrother, or stepsister (for example, your niece or nephew), whom you cared for as your own child; or (c) a foster child (that is, any child placed with you by an authorized placement agency whom you cared for as your own child), and
• Is a U.S. citizen or national, or a resident of the U.S., Canada or Mexico. There is an exception for certain adopted children.

Note: The above requirements are not the same as the requirements to be a qualifying child for the Earned Income Credit.

To claim a foster child as a qualifying child for the Child Tax Credit, the child must be placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.

A grandchild is any descendant of your son, daughter, adopted child, or stepchild and includes your great-grandchild, great great-grandchild, etc.

This credit is in addition to the Credit for Child and Dependent Care Expenses and Earned Income Credit.

This credit is used to reduce a tax liability and is not used as a straight credit. If your tax liability is more than the credit and you qualify, you will receive the full credit ($2000 per child). If your tax liability is less than the full credit, you will receive a credit equal to your tax liability.