Can you claim the Child Tax Credit without having generated income in 2023?
Tax season has begun, and as you prepare your return, find out how you can claim the Child Tax Credit without having generated income last year.
Tax season in the US began on Monday, Jan. 29 and will run through April 15, during which time the Internal Revenue Service will be receiving and processing tax returns corresponding to fiscal year 2023. The process will involve millions of taxpayers at the federal level.
In addition to reporting your income to the IRS, your tax return can also be used to claim one of the many tax credits available to eligible filers. Among the most popular of these is the Child Tax Credit (CTC), which provides financial assistance to low- to moderate-income parents.
Through this, the tax agency offers up to $2,000 for each dependent between six and 17 years old. To be eligible, parents must have a certain income threshold. If your annual AGI exceeds $200,000 for individuals and $400,000 for couples filing jointly, the IRS will reduce the credit by $50 per $1,000. But what happens if income is really low? Can you still apply for the CTC?
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Can you claim the Child Tax Credit without having generated income in 2023?
According to Turbotax, a company dedicated to providing accounting solutions for tax filing, the IRS has made some modifications to extend help to those most in need. Among these new changes is the implementation of the Additional Child Tax Credit (ACTC), with which low-income parents will be able to request a refund of $1,600 of the $2,000 available in the CTC.
In other words, the ACTC is an extension of the CTC for those who do not meet the minimum income threshold or who recorded almost no income throughout the year. According to the tax preparation company, interested families must have a minimum income of $2,500. This includes wages, compensation for self-employment or disability payments. Unearned income, such as pensions, social security, unemployment benefits, or child support, is not counted.
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How to apply for the ACTC?
For families to apply for the ACTC they must meet the following eligibility requirements:
- Have a child under the age of 17 at the end of the tax year, who has a valid Social Security number
- Verify relationship and residence
- The child must not provide more than half of his or her own support
- The child must have lived with you for more than half of the tax year
- The child must be claimed as a dependent on your return
Before applying, check if you qualify based on these criteria. If you believe you are eligible for ACTC, you can file Form 8812 on your tax return. For more information, visit the section on child tax credits on the official IRS website.