Basics on the CTC

The Child Tax Credit (CTC) is a federal tax credit that helps families with qualifying children reduce their federal income tax liability.

The child tax credit comprises two components:

  • Nonrefundable child tax credit (CTC); and
  • The refundable portion of the CTC, which is the Additional Child Tax Credit (ACTC).

What Are Qualifying Children for the Child Tax Credit

For a parent or legal guardian to claim the CTC, their child must meet the definition of a qualifying child for federal tax purposes. A qualifying child meets the following requirements for a given tax year:

Age Test. The child must be under 17 years old at the end of the tax year. If the child turns 18 on the last day of the tax year, they do not qualify.

For example, John Smith has one daughter, Sarah, and wants to claim her for the CTC. Sarah’s birthday is December 26th. On John’s 2022 tax return, John could claim Sarah for the CTC because she turned 17 on December 26, 2022. On John’s 2023 tax return, he could not claim Sarah because she turned 18 on December 26, 2023. Because she was over 17 at the end of 2023, she was ineligible for the CTC on the 2023 tax return.  

Relationship Test. The child must be the son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half-sister, half-brother, or a descendant of any of them, including grandchild, niece, and nephew.

For example, John Doe has one son, Robert, who is 12 years old. John and his son live at home full-time with John’s parents. John’s parents (i.e., Robert’s grandparents) meet the relationship test for a qualifying child because Robert is their grandchild.

Support Test. The child cannot have provided more than one-half of their own support during the tax year. The support provided does not necessarily have to come from the same person who will claim the child as a dependent.

Dependent Test. The taxpayer must claim the child as a dependent on their Form 1040 (US Individual Income Tax Return). The taxpayer lists their dependents on Page 1 of the Form 1040. For a taxpayer to claim a dependent, the individual must meet the requirements in IRC Section 152. Taxpayers can find more information on the IRS website regarding who qualifies as a dependent.

Citizenship Test. The child must be a U.S. citizen, a U.S. national, or a U.S. resident.

Residency Test. The child lived with the taxpayer for more than half of the year. A temporary absence from the home will not prohibit the taxpayer from claiming the child as a dependent. For example, a temporary absence may include events like summer camp, living with grandparents temporarily, or a student attending boarding school.

Valid Social Security Number (SSN). The qualifying child must have a valid SSN by the original due date of the tax return. If the taxpayer files an extension request using Form 4868 (Extension of Time to File U.S. Tax Return), the taxpayer can wait for the SSN to become available and then file Form 1040 before the extended due date.

Additional Pages Covering the Child Tax Credit

More Information on the Child Tax Credit

Taxpayers seeking more information on child tax credits can visit the IRS website and the IRS Form 8812 instructions for CTC and ACTC. The IRS Publication 501 (Dependents, Standard Deductions, and Filing Information) contains guidance on which persons can be claimed as dependents on Form 1040 (US Individual Income Tax Return).