Much has been made recently of the Child Tax Credit. And what’s not to like? This refundable credit could be worth thousands of dollars in refund and recent legislation allows advance payments to qualified taxpayers.
But what if a taxpayer’s dependents just don’t qualify for the Child Tax Credit?
The Internal Revenue Service there’s a credit for those dependents too: the aptly named Credit for Other Dependents.
While not quite as beneficial as the Child Tax Credit—it’s worth $500 for each dependent that qualifies—the Credit for Other Dependents still gives some measure of help to taxpayers who might otherwise go without.
Like most tax credits, there are conditions for qualifying, including:
- Dependents who are age 17 or older.
- Dependents who have individual taxpayer identification numbers.
- Dependent parents or other qualifying relatives supported by the taxpayer.
- Dependents living with the taxpayer who aren't related to the taxpayer.
Taxpayers will see a reduction in the credit if their income is more than $200,000. The phase-out for married couples filing jointly is $400,000.
Taxpayers can claim the Credit for Other Dependents if the person claimed for the credit is a dependent on the taxpayer’s tax return. The dependent being claimed, however, cannot be used to claim either the Child Tax Credit or the Additional Child Tax Credit.
Any dependent claimed for the Credit for Other Dependents must be a U.S. citizen, U.S. national or a resident alien.
The Instructions for Form 8812 can help taxpayers decide if they can claim the Credit for Other Dependents.
For more information, check out:
- Whom May I Claim as a Dependent? and
- Publication 501, Exemptions, Standard Deduction and Filing Information.
Source: IRS Tax Tip 2021-144