How to Claim Child Tax Allowances

With a qualifying child, you can claim the child tax credit and reduce your tax bill.

With a qualifying child, you can claim the child tax credit and reduce your tax bill.

Having kids opens the door to a wide variety of federal tax deductions and credits. The child tax allowance, also known as the child tax credit, is available to "Nestles" who support at least one child under age 17. The credit cuts the tax that you owe the Internal Revenue Service by as much as $1,000 per child. To be eligible for the credit, the child must meet the criteria of a qualifying child. In addition, you must meet certain income requirements, which is determined according to your filing status.

Age Test

To meet the requirements of a qualifying child, your child must pass six tests — age, support, relationship, citizenship, dependent and residence. The maximum age for a child to qualify for the child tax credit is 16 years. If the child is 17 at the end of the tax year, the child does not qualify for the child tax credit.

Support Test

You must provide at least half of the child's support throughout the tax year to qualify for the child tax credit. This situation can be tricky if another family member, such as the other parent or a grandparent, help support the child. If the child has a job or receives money from another source, make sure that the amount does not exceed what you paid to support the child.

Relationship Test

The IRS mandates that the child must be your blood, step- or adopted child, sister, brother, grandchild or any descendent of a family member. If the child is not legally related to you, you can't use the child to claim the child tax credit. Refer to IRS Publication 972 for more information.

Citizenship Test

Confirm that the child you are attempting to claim is a U.S. citizen, resident alien or national. The IRS might require proof of citizenship by requesting copies of a Social Security card, birth certificate or other documentation. If the child was adopted or born in the previous tax year and you have not received the child's Social Security card, wait to file your income taxes. If the tax deadline approaches, file a return without claiming the child and child tax credit to avoid late fees and penalties. You can always file an amended return when you receive the card.

Dependent Test

Verify whether you claimed the child on your income tax return. The IRS requires that you claim the child as an exemption on your return to claim the child tax credit. If you did not claim the child due to an agreement with the child's other parent, you cannot claim the child tax credit.

Residence Test

According to the IRS, the child must live in your home for at least half the tax year to qualify for the child tax credit. Some special circumstances, such as illness, school, joint custody agreement and vacation are exceptions to this rule. Refer to IRS Publication 972 for more information.

Income Limitations

Your modified adjusted gross income must meet certain requirements to qualify for the child tax credit. As your income reaches these limits, the amount of your credit begins to phase-out, or become lower. As of 2011, having income above $75,000 for a single taxpayer, $110,000 for married taxpayers filing jointly and $55,000 for married taxpayers filing separately can cause a reduction to your child tax credit.

Claiming the Credit

Visit the IRS website at and obtain Form 1040A or Form 1040, depending on your tax situation. Also, grab a copy of the corresponding form's instructions. Prepare your income taxes normally, but stop when you reach the line labeled "Child Tax Credit." Refer to your form's instructions and complete the "Child Tax Credit Worksheet" to calculate the amount of your credit. Enter the amount of your credit in the line labeled "Child Tax Credit" on Form 1040 A or Form 1040. Complete the rest of the tax form to determine whether you will owe taxes or receive a refund. If the child tax credit does not cover the tax that you owe the IRS, you might qualify to claim the additional child tax credit. For more information, refer to the form's instructions and Form 8812.


About the Author

Angela M. Wheeland specializes in topics related to taxation, technology, gaming and criminal law. She has contributed to several websites and serves as the lead content editor for a construction-related website. Wheeland holds an Associate of Arts in accounting and criminal justice. She has owned and operated her own income tax-preparation business since 2006.

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