Understanding the Child Tax Credit

What Is the Child Tax Credit?

The Child Tax Credit (CTC) is one of the most valuable tax benefits for families. It directly reduces the amount of tax you owe—dollar for dollar—for each qualifying child.

Credit Amount

• **$2,000 per qualifying child** under age 17 at the end of the tax year
• Up to **$1,700** of the credit is refundable as the Additional Child Tax Credit (meaning you can get it back even if you don't owe taxes)

Who Is a Qualifying Child?

Your child must meet all of these requirements:

• **Age:** Under 17 at the end of the tax year
• **Relationship:** Your son, daughter, stepchild, foster child, sibling, or a descendant of any of these
• **Residency:** Lived with you for more than half the year
• **Support:** Did not provide more than half of their own financial support
• **Citizenship:** Must be a U.S. citizen, national, or resident alien with a valid SSN
• **Dependent:** You must claim them as a dependent on your return

Income Phase-Outs

The credit begins to phase out at higher income levels:

• **Single filers:** Phase-out begins at **$200,000** AGI
• **Married filing jointly:** Phase-out begins at **$400,000** AGI
• The credit is reduced by **$50 for every $1,000** (or fraction thereof) over the threshold

For most families, the full credit is available.

Additional Child Tax Credit

If the Child Tax Credit exceeds your tax liability (you don't owe enough to use the full credit), the Additional Child Tax Credit (ACTC) lets you receive up to $1,700 per child as a refund. This requires you to have earned income of at least $2,500.

How FileJoy Handles It

Good news: if you've added your children as dependents in your household profile and they meet the requirements, FileJoy automatically calculates and applies the Child Tax Credit. You'll see it reflected in your refund estimate on the dashboard.

To verify:

1. Click **Deductions & Credits** in the left sidebar
2. Look for the **Child Tax Credit** section
3. Confirm the number of qualifying children and the credit amount

Tips

• Make sure each child's SSN is entered correctly in your household profile
• Children who turn 17 during the tax year do **not** qualify (they must be under 17 at year-end)
• If your income is near the phase-out threshold, check your estimate carefully