My natural born child meets ALL of the criteria that should result in a $2000 tax credit. Turbo Tax continues to show $500, and won't even let us correct the mistake!

If the child was born in 2018, make sure you are reporting they lived with you the entire year because they lived with you the entirety of their life.

Be aware that the Child Tax Credit requirements have changed and all of the following must be met:

·       Child must be younger than age 17 by December 31 

·       Must by your child (biological, step, adopted or foster); brother or sister; niece, nephew or grandchild 

·       Must provide half their support 

·       Must be claimed as your dependent (see Qualifying Child Test) 

·       Must be US Citizen, US National or Resident Alien 

·       Must live with you more than half the year 

·       Must have a SSN or have been issued an alternative tax number before 2018

There has been lots of hype in the news about the new $2000 Child Tax Credit.  Unfortunately, some people do not yet understand that it does not mean they will automatically receive $2000 per child just for filing a tax return.

Do not assume your refund will include $2000 per child for child tax credits.  It does not work that way.  The CTC is used first to reduce your tax liability to zero. After that, there is a refundable portion —up to $1400 — called the Additional Child Tax Credit that is calculated based on the amount of income you earned.  You do not necessarily get the maximum amount.  You get 15% of the amount of income earned above $2500--UP to the maximum amount possible.

If your child turned 17 in 2018, even on the last day of 2018, you do not get the child tax credit.  There are no exceptions to the rule.  You can still claim your child as a dependent.

Your child must have a Social Security number to get the CTC.  

If your child was born in 2018 you need to say the child lived with you for the WHOLE year.

If your child lived with you for less than half the year you cannot get CTC.

If you did not earn at least $2500 you cannot receive the child tax credit.  Beyond that amount the CTC you receive is affected by your tax liability and the amount you earned.  You might not get the full $2000 of CTC.

The child tax credit is reduced by $50 for every $1000 of AGI over these limits:

Married filing jointly                $400,000    (CTC disappears at $440,000)

Single, Head of Household, Married Filing Separately or qualifying widower               $200,000  (CTC disappears at $240,000)

Look at your 2018 tax return to see the credits you received:

Child tax credit line 12a

Additional Child Tax Credit line 17b   (schedule 8812) 

Credit for Other Dependents line 12a

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