The amount of Child Tax Credit was increased from $1000 to $2000 per child for the last financial years 2018 and 2019. This rule is amended by the President Trump. If your child is qualified, that may also permit you to claim the tax credit with earned income credit. If the income rises above the $400000 you will not allow claiming the child tax credit and this will be phased out when you reach a higher income level. You can calculate the Dependent Tax Credit for 2020 to know the amount of tax credit.
How to consider a Child as a Dependent
You need to fulfill some conditions if you want to claim your child as a dependent of yours. You must need to qualify the relationship test:
- You are the biological parent of a child or you adopt the child after marriage
- The child is you stepchild whom you want to make dependent
- The child is your Foster child
This is necessary to claim a child as a dependent that he/she must fulfill the condition of living for more than six months with you. During this period, the birth and death of a child is exempt. The age of the child is also considered by the end of the financial year. If your child is younger than 19 years and under 24 years and the child is a full-time student for a minimum of five months during the year. Age rule is not applicable for permanently disabled child. if you want to qualify a child as a dependent, that child may not provide their support during that financial year.
Tax, child and divorced parents
Both the parents never claim a child as their dependent whether they are divorced. Only one of the parents can claim the dependency of the child during the same tax year. If the parents of the child get a divorce, the majority for claim belongs to that parent with whom that child lives after divorce. Sometimes both parents can get equal time with the child for that financial year, then that parent will make the claim whose adjusted gross income is high.
Earned Income Credit and check Child Criteria
The child who qualifies the Child criteria is used by only person to get Earned Income Tax Credit. The new Earned Income Credit Calculator for 2020 helps you to calculate the earned tax credit. The person who claims the credit must qualify the relationship test, age test, and home address test. You must be more than 24 years but not exceeding the age of 65 and you don’t have a child, you can’t qualify as dependent for any other person. It is necessary to live in the United States for more than 6 months for the tax year.
Qualified Dependent Child or Relative
A qualifying dependent means a qualifying child or any other qualifying relative for claiming the tax purpose. But qualifying relative is not allowed for the Child Tax Credit and Earned Income Credit claim. If a child wants to be dependent, he/she must contain the citizenship of the United States. If anyone takes personal exemption with filing his tax form, you can’t make that person as your dependent.