Here’s What you Need to Know About Child Tax Credit 2023

Nov 10, 2023 By Triston Martin

There are a lot of benefits that the children get in America. One of the significant benefits that is granted by the government to the taxpayers who have their children is the Child Tax Credit. This type of credit is eligible for kids who are under the age of 17 and is given at the end of the year.

There are a lot of different changes that happen every year. New requirements and policies are made when it comes to the Child Tax Credit. If you are wondering what happened to the tax credit this year and what the changes happened, this article is just for you. Mentioned below is everything you need to know about Child Tax Credit and how it works. So, let's jump right into it.

What is Child Tax Credit?

The tax credit is the credit that is given to the parents and helps them raise their children comfortably. This tax credit is about $2000 for each child who qualifies for this credit. When it comes to the CTC, it is essential to know that you should be earning about $2500 yearly to apply for this credit.

Since the CTC is about $2000 maximum, the amount you will be getting depends on the family size and the income of the family. However, if the head of the family is able to make up to $200,000 and the married couple can make up to 400,000, then the credit begins to phase out. For an increase of every $1000, the Child Tax Credit will be reduced by about $50.

Requirements for Child Tax Credit:

The next thing you should know when it comes to the Child Tax Credit is the eligibility. During the last couple of years, the requirements and policies for the CTC have changed drastically, and there are different things you need to know when it comes to determining whether your child is eligible for the Child Tax Credit. Following are the seven things that you need to check and know about.


The first and the most important thing when it comes to Child Tax Credit is age. According to the policies, the child must be under the age of 17 if they want to claim the Child Tax Credit. This is one of the most crucial things on which the Child Tax Credit is based.

Relationship Test:

The relationship of the child you are going to apply for the Child Tax Credit is very necessary. You can only apply for the credit for your child. Other than this, if you have a stepchild or a foster child, you can only get the credit if the court or the respective authorized agencies have authorized it.

You are also allowed to claim the tax credit for an adopted child only if you have the proper documentation and permission from the authorities. This tax credit is also eligible for brothers, sisters, stepbrothers, and step sisters only if they are under the age of 17.

You can also claim credit for the descendants of the qualifying people, such as your nieces, grandchildren, and even nephews, if they meet all the other requirements.

Support Test:

If you want to apply for the CTC, then it is essential to know that support plays an important role. You need to ensure that the child is not paying for their own financial needs during the following year, and if they do, they won't be eligible for the CTC.


For the Child Tax Credit, it is crucial that the child has to be a citizen of the US, a US national, or even a US resident alien. If your child is not a citizen of the US and does not have citizenship, then you won't be able to claim the CTC.

Residence Test:

Another test that comes when applying for CTC is the residence test. The child you are applying the claim for must be living with you for more than half of the tax year. However, there are a few exceptions that come under this category.

A child, if born during the tax year you have claimed, is considered to be living with you for that entire year.

A child who might have died after the birth, and you have applied for the tax credit, is also conferred to live for the entire year.

If there have been temporary absences of you or the child for particular reasons, it is considered that the child has lived with you for the entire year. Vacations, military services, detention in a juvenile facility, business, medical care, and even school programs are considered a few exceptions.

Some conditions apply for the residency of children who have divorced or separated parents.

Family Income Test:

Family income also plays an important role when it comes to this child tax credit. According to the income of the family, the credit will be increased or decreased.

According to the new rules in 2023, the phase out for the credit of the child tax begins when the guardian is able to earn $200,000 in income. For the married and joint family system, if the family is able to earn $400,000, then the credit starts to phase out.

How to Apply for the Child Tax Credit?

Now that you know the different things and when your child is eligible for the CTC. The next thing that comes is how to apply for the Child Tax Credit. You just need to enter all the requirements on Form 1040. You also need to complete the Scheduled 8812 to know the amount of credit you will be receiving and then add it to your tax return.

Final Words:

America has a lot of different policies and ways through which they are trying to make the lives of people a lot more easy. Among these policies, we have the Child Tax Credit, which has made the lives of people very easy as it helps them raise their children comfortably. However, in recent years, there have been changes in the requirements and the eligibility criteria. Therefore, in this article, we mentioned everything you need to know about the CTC and how to apply it.

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