Child Tax Credit
The child and dependent care tax credit
(usually referred to as the Child Tax Credit) is based upon a party's income
and is deducted from the amount of taxes a person owes. However, if the parents of a child file their taxes separately, only one parent is entitled to claim the Child Tax
Credit for each child.
Generally, the parent entitled to claim
the Child Tax Credit is the one who is awarded primary custody of the child(ren) and with whom the child(ren) live for more than half the year. Nevertheless,
the parties may negotiate and enter a settlement agreement allowing the
non-custodial parent to claim this credit. Where there is more than one child,
the parties may agree to claim one or more of the children and/or may claim the credit in alternating years.
Parents who pay for childcare may also
be eligible for the Child and Dependent Care Credit, which helps parents pay
for daycare for a qualified dependent while working.
Requirements to Claim Child Tax Credit
You must meet the below requirements to
be eligible for the Child Tax Credit for the 2022 tax year:
- Gross income of $200,000 or less ($400,000 or
less if you're filing jointly);
- The child you're claiming was under the age
of 17 on December 31, 2022;
- The child has a valid Social Security number;
- The child is your legally recognized child,
stepchild, foster child, sibling, half-brother or half-sister, or descendant
of one of these categories;
- The child has contributed to no more than
half of their own financial support in the relevant tax year;
- The child lived with you for over half the
year;
- You are claiming the child as a dependent on
your tax return; and
- You are a US citizen or resident alien.
It is important to discuss your options
and the specifics of your case with your divorce attorney and a certified
public accountant or certified tax preparer if you have questions regarding the
Child
Tax Credit.
Written by: Rebekah Ann James