Maximizing Your Child Tax Credit: Avoiding Common Mistakes
As a parent, you’re likely aware of the child tax credit, a valuable benefit that can provide up to $2,000 per child under 17. However, mistakes when filing can delay your refund and leave you missing out on thousands of dollars. In 2022, over 18 million filers claimed the additional child tax credit, but many more may be eligible.
Understanding Eligibility
To claim the child tax credit or additional child tax credit (ACTC), you must have a “qualifying child.” The IRS guidelines include:
- The child must be under age 17
- The child must be your son, daughter, stepchild, foster child, brother, sister, or a descendant of any of them (e.g., grandchild, niece, or nephew)
- The child must have lived with you for more than six months of the tax year
- You must claim the child as a dependent on your tax return
- You must be a U.S. citizen, national, or resident alien
Avoiding Common Mistakes
One common mistake is filing before receiving your child’s Social Security number. Typically, parents apply for a Social Security number in the hospital when completing their baby’s birth certificate. However, it can take one to six weeks to receive the number, creating time pressure around tax season. Filing a tax return and claiming the child tax credit before receiving the Social Security number can result in denial.
Using Tax Software or a Preparer
To minimize errors, consider using tax software or a preparer. Tax software typically includes credit eligibility checks, and preparers can guide you through the process. This can help avoid mistakes and ensure you receive the credit you’re eligible for.
Filing Extensions
If you don’t have your child’s Social Security number before the tax deadline, request an extension. This gives you six months more to file your return, but you must still pay taxes owed by the original deadline.
Don’t Miss Out
By understanding the child tax credit eligibility guidelines and avoiding common mistakes, you can ensure you receive the credit you’re eligible for. Don’t miss out on thousands of dollars – file accurately and on time to maximize your refund.
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