Child Tax Credit Explained

Child Tax Credit Explained

Welcome to tax teach today I'm going to Go over what the child tax credit is I Want to give an overview of the credit You know how much the credit is what you Need to qualify for the tax credit and a Couple other things about the credit so That you know more about this common tax Credit that you can take on your tax Return you might be asking why does the Government give a child tax credit the Government is trying to help families And individuals who are raising children Help with some of that financial burden That comes with raising a children but Providing a tax credit the government When they have tax credits it's usually To incentivize certain activities and One of those is to have children more Children equals you know more taxpayers So the government always is trying to Incentivize the activity of raising Children or having children in order to Take the child tax credit there are some Criteria that you need to meet in order To have a qualifying child that's Eligible for the credit I'm going to go Over those criteria now here is a list Of the criteria that you need to meet in Order to have a qualifying child where You can take the child tax credit I'm Not going to go over all these criteria The things you should think of off the Bat is your qualifi your child has to be Under the age of 17 they have to have a

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Relationship like son daughter stepchild A couple other relationships that are Similar to this you need to be providing A good amount of support the child needs To be living with you at least Half the year you need to be providing Support for at least half the year and You can see there's a couple other Criteria that needs to be met just know That you have to have a qualifying child And that means meeting the criteria then You might be able to to take the child Tax credit when it comes to the amount Of child tax credit that you can receive A taxpayer can receive up to $2,000 per qualifying child um if you Don't have a qualifying child you might Have a qualifying dependent and you can Get up to $500 of that um tax credit the Child tax credit is a refundable credit And what I mean by that is credits can Either be refundable or non-refundable a Non-refundable credit is whatever taxes You owe um your credit can only offset Taxes that you owe so if you owe zero Taxes and you have a non-refundable Credit you're not going to get any tax Credit from that now a refundable tax Credit is if you have zero taxes that You owe the government will pay you Money even though you don't owe any Taxes in the case of a child tax credit That's up to $1,600 for 20123 the child Cash credit does have some income

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Limitations if your modified adjusted Gross income is above 200,000 for a Single taxpayer or 400,000 if you're Married fining jointly the amount of Child tax credit that you can get um Gets reduced as your income go goes Above that threshold so keep keep in Mind if you're a single taxpayer and Your modified adjusted gross income is Above 200,000 or if you're married Filing jointly and your modified Adjusted gross income is above 400,000 Your the amount of credit you can take Starts going down until you reach a Certain limit right now is a table Showing that um the limitation as you Have more income the limitation of the Amount of child tax credit you can Receive in order to receive the child Tax credit you have to prepare your tax Return your form 1040 and there's a Schedule on your form 1040 schedule 8812 And that's your child task credit Schedule you'll have to complete this in Order to take the child tax credit for That tax year another credit people Might think of when they think of the Child cash credit is a Child Independent Care Credit this is a whole different Kind of credit that I'm not going to go Into but this credit is for people who You know both spouses work and they have To have their child go to daycare care Or some other place to take care of

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Their child as they work now these Expenses that you pay to like a daycare Or some other kind of a facility to take Care of your children when you work These amounts Can U you might be able to Take a cash credit on the Child Independent Care Credit just know that If you are eligible for the child task Credit um you might be eligible also to Receive a Child Independent Care Credit Uh that that's a whole different video That I can make in the future but just Know if you pay Expenses um for to take care of your Children when you're outw working you Might be eligible for that credit we've Come to the end of the video I hope you All found this video informative me Going over what the child cash credit is Um the whole goal of this video is just Give a brief overview of what the credit Is and so that if somebody mentions it To you or when you're preparing your tax Return you see that you have at least Entry level knowledge of what the child The child cash credit is I hope you all enjoyed the video if you Like the video hit the like button lets Me know that I'm creating good videos For you all thank you for watching and I'll see you next Time

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