Every year, millions of families rely on the child tax credit, but small filing errors can create delays in processing your return and getting your refund, tax experts warn.
For the 2024 tax year, the child tax credit can offer up to $2,000 per child under the age of 17. However, the amount you can claim starts shrinking if your adjusted gross income surpasses $200,000 for individuals or $400,000 for married couples filing together.
There’s another piece of good news called the additional child tax credit (ACTC), which is refundable up to $1,700. This means even if you don’t owe taxes, you might still be eligible for this refund, a boon for households with lower incomes.
Still, some low-income families miss out because they aren’t aware of how to claim it, as pointed out by National Taxpayer Advocate Erin Collins in her January report to Congress.
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In 2022, over 18 million returns took advantage of the additional child tax credit, according to recent estimates from the IRS.
By law, the IRS can’t send out ACTC refunds before the middle of February. However, if you’re an early filer, you should be able to check your refund status on the "Where’s My Refund" portal by February 22nd.
Now, let’s go over how you can sidestep common child tax credit mistakes that could further hold up your refund.
Understanding ‘Qualifying Child’
One frequent slip-up involves misunderstanding who qualifies for the child tax credit.
"It’s easy to get mixed up," says Tom O’Saben, an enrolled agent and director of tax content and government relations at the National Association of Tax Professionals.
To snag the child tax credit or ACTC, you’ll need to have a "qualifying child," as per IRS guidelines. Some criteria include:
- Age: Must be under 17 at the end of the tax year.
- Relationship: Must be your child, stepchild, foster child, sibling, or a descendant like a grandchild or niece/nephew.
- Dependent Status: Must be listed as a dependent on your tax return.
- Filing Status: The child should not be filing a joint return.
- Residency: Needs to have lived with you for more than half the year.
- Support: Should not be paying more than half of their personal expenses.
- Citizenship: Must be a U.S. citizen, national, or resident alien.
- Social Security Number: Must have a valid Social Security number by the tax filing deadline, extensions included.
Consider using tax software or hiring a preparer to avoid eligibility errors—a suggestion from O’Saben. These tools are generally programmed to check for eligibility and thus reduce mistakes.
Ensuring a Social Security Number
Normally, when a child is born, parents apply for their Social Security number at the hospital while dealing with the birth certificate. The Social Security Administration advises that this process might take between one and six weeks, potentially creating a crunch around tax time.
Submitting your tax return and trying to take the child tax credit before having the Social Security number is a mistake, warns O’Saben.
"I’ve seen people lose out on the child tax credit because they filed their taxes before receiving the Social Security number for their dependent," he said. "Once it’s filed, you can’t just fix it later."
If you don’t have that Social Security number by the filing deadline, O’Saben recommends filing for an extension, which grants an extra six months to submit your return.
Just remember, you’ll still need to pay any taxes owed by the original deadline, even if you extend the filing of your return.
