Family situations can be unique and ever changing. Because of this, you need to be able to comprehend the intricacies of the child tax credit (CTC), the additional child tax credit (ACTC) and the other dependent credit (ODC) to accurately assess your clients’ tax situations.
This understanding will ensure your clients receive the full benefits they’re entitled to, optimizing their tax returns and minimizing possible financial burdens.
Below, you’ll find a few of the top questions from a recent webinar on the topic and their accompanying answers. If you choose to attend the on-demand version of this webinar, you can access the full recording and the entire list of Q&As.
Q: Which parent signs Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent – the parent who cannot claim the child tax credit (CTC) or the one who can?
A: The custodial parent files Form 8332 to release the dependency exemption to the noncustodial parent, allowing the noncustodial parent to claim the CTC for each qualifying child who meets certain conditions. Thus, the parent who cannot claim the CTC signs Form 8332, not the one who can claim it.
Q: Isn’t the CTC only for children under age 17 and disabled children?
A: To qualify for the CTC, each qualifying child must be under age 17, even if the child is totally and permanently disabled. While a disabled child of any age can be claimed as a dependent under the qualifying child rules, they must be under age 17 to qualify for the CTC.
Q: Is there a maximum number of children a taxpayer can claim for the CTC?
A: No, there is no maximum. Taxpayers can claim the CTC for each dependent who is a qualifying child under age 17 and has the required Social Security number.
Q: Now that the identity protection personal identification number (IP PIN) allows a duplicate dependent return to be e-filed, how does this affect certain credits like the CTC?
A: Beginning with the 2025 filing season, taxpayers with an IP PIN can e-file a duplicate dependent return. This enables them to claim the child as a dependent on the e-filed return, along with applicable credits like the CTC. However, this does not guarantee they are entitled to claim the child. The IRS will reconcile who is eligible to claim the child and the applicable credits afterward.
To learn more about calculating child tax credits, you can watch our on-demand webinar. NATP members can attend for free, depending on membership level! If you’re not an NATP member and want to learn more, join our completely free 30-day trial.
About National Association of Tax ProfessionalsThe National Association of Tax Professionals (NATP) is the largest association dedicated to equipping tax professionals with the resources, connections and education they need to provide the highest level of service to their clients. NATP is comprised of over 23,000 leading tax professionals who believe in a superior standard of ethics and exemplify professional excellence. Members rely on NATP to deliver professional connections, content expertise and advocacy that provides them with the support they need to best serve their clients. The organization welcomes all tax professionals in their quest to continually meet the needs of the public, no matter where they are in their careers.
The NATP headquarters is located in Appleton, WI. To learn more, visit www.natptax.com.
Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing.