Who is a dependent/qualifying dependent. Claiming Child tax/dependent credit (also ready Steps to apply for an ITIN).
The term dependent means, a qualifying child or qualifying relative. You qualify when you mean few of the tests.
To be a qualifying child – the child must be your son, daughter, stepchild, brother, sister (includes stepbrother/sister).
(i)Child under age 19 at the end of the year;(ii) under age 24 at end of the year, a student or (iii) any age if permanently and totally disabled.
The main condition is that the child must live with you for more than half of the year, and the child must not have provided more than half of his/her own support for the year.
To be a qualifying relative – The persons gross income for the year must be less than $ 5050.You must provide more than half of the persons total support for the year.
The person must live with you for the whole year, he/she should be a US citizen or resident of US, Mexico or Canada.
Relative (will not include cousins & foster parents).
Good news – You may be entitled to a child tax credit (CTC) for each of your qualifying child who is underage of 17 at the end of the year.
In year 2025, the credit for each qualifying child is $ 2,200 (will be adjusted for inflation thereafter). Partially refundable.
The phase out threshold remains at $ 400,000 for joint filers (MFJ) and $ 200,000 for single filers.
Condition is you and your child should hold a valid SSN (Social Security Number)
What if your child is born outside the USA (example: India/China) and he/she is your dependent.
You cannot claim the $ 2,200 CTC, but it is eligible to claim Credit for Other Dependents (ODC) worth up to $ 500 per dependent (non-refundable credit).
You can reduce your taxes to zero but will not receive any portion of the credit back as refund.
To claim this credit, your child holds a valid ITIN (Individual Taxpayer Identification Number).
How to apply for ITIN (Individual Taxpayer Identification Number)?
- Use form W-7 (find on the IRS page) to apply.
Link – https://www.irs.gov/pub/irs-pdf/fw7.pdf
- After filling in the application, you need to include that form along with your U.S federal tax return.
- You can either apply by mail, or the suggested way is to apply in person at an IRS taxpayer assistance center near you.
- Once your final draft of return (form 1040) is ready, take a print of it (sign at the required places on the form 1040). Enclosed with your form W-7.
- Call and request a person appointment at your nearest IRS taxpayer assistance center, to submit the documents.
- You may receive the ITIN by mail to your address, with a minimum waiting period of 45-60 days.
- You need not again file your return online for that year, as you have submitted a signed copy physically at the IRS taxpayer assistance center.
Insert links Also read about – Five filing statuses, Benefit of selecting MFJ vs single status – tax filing.
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