Aadditional Child Tax Credit could be very important for a lot of families in the United States of America.
For those who owe less tax than the available credit, they cannot usually claim the full Child Tax Credit.
That could mean, though, that they are able to claim the refundable Additional Child Tax Credit.
The Additional Child Tax Credit (ACTC) can give parents the ability to lower their tax bill but also to get more money into their pockets to help raise the children and offset the costs that children bring.
According to a 2015 report by the US Department of Agriculture, it costs roughly 233,000 dollars to cover food, housing, transportation, health care, clothing, child care, education, and everything else a child needs until the age of 17.
How much is Child Tax Credit worth?
The standard Child Tax Credit is worth up to 2,000 dollars for each child where these requirements are met:
- The child is younger than age 17 at the end of the tax year.
- The child is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, grandchild, niece, or nephew.
- You claim the child as a dependent.
- The child does not provide more than half of their own support.
- The child lived with you for more than half of the year.
- The child is a US citizen, US national, or US resident alien.
- The child does not file a joint return with anyone else, unless the only reason they file a return is to claim a refund of taxes withheld or estimated taxes paid.
What is Additional Child Tax Credit (ACTC)?
The point of the ACTC is to help working parents with low to moderate incomes. Therefore, families must have a minimum of 2,500 dollars of earned income to claim the ACTC.
Parents whose income comes solely from “unearned” income, such as interest and dividends, pensions and annuities, social security, unemployment, alimony or child support, do not qualify.