Millions of families claim the child tax credit every year — and filing mistakes can delay the processing of your return and receipt of your refund, according to tax experts.
For 2024 returns, the child tax credit is worth up to $2,000 per kid under age 17, and decreases once adjusted gross income exceeds $200,000 for single taxpayers or $400,000 for married couples filing jointly.
The refundable portion, known as the additional child tax credit, or ACTC, is up to $1,700. Filers can claim the ACTC even without taxes owed, which often benefits lower earners.
However, a lower-income family who doesn’t know how to claim the credit “misses out on thousands of dollars,” National Taxpayer Advocate Erin Collins wrote in her annual report to Congress released in January.
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More than 18 million filers claimed the additional child tax credit in 2022, according to the latest IRS estimates.
By law, the IRS can’t issue ACTC refunds before mid-February. But the Where’s My Refund portal should have status updates by Feb. 22 for most early filers, according to the IRS.
Here’s how to avoid common child tax credit mistakes that could further delay your refund.
Know if you have a ‘qualifying child’
One child tax credit mistake is not knowing eligibility.
The rules can be “very confusing,” according to Tom O’Saben, an enrolled agent and director of tax content and government relations at the National Association of Tax Professionals.
To claim the child tax credit or ACTC, you must have a “qualifying child,” according to the IRS. The qualifying child guidelines include:
- Age: 17 years old at the end of the tax year
- Relationship: Your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister or a descendant of these
- Dependent status: Dependent on your tax return
- Filing status: Child is not filing jointly
- Residency: Lived with you for more than half the year
- Support: Didn’t pay for more than half of their living expenses
- Citizenship: U.S. citizen, U.S. national or a U.S. resident alien
- Social Security number: Valid Social Security number by tax due date (including extensions)
You may avoid some eligibility errors by filing via tax software or using a preparer versus filing a paper return on your own, O’Saben said. Tax software typically includes credit eligibility, which can minimize errors.
Missing Social Security number
Typically, parents apply for a Social Security number in the hospital when completing their baby’s birth certificate. But it can take one to six weeks from application to receive that number, according to the agency, which can create time pressure for families with a new addition around tax season.
Filing a tax return and claiming the child tax credit before receiving the Social Security number is a mistake, O’Saben said.
“I have seen [the child tax credit] denied for people who have filed before they got the Social Security number for a dependent,” he said. “And there’s no going back.”
If you don’t have the number before the tax deadline, you should request an extension, which gives you six months more to file your return, O’Saben explained.
However, you still must pay taxes owed by the original deadline.