Family situations can be unique and ever-changing. Because of this, you understand 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: Does a disabled child, aged 17 or older, qualify for the child tax credit (CTC)?
A: No, they do not qualify for the CTC because they are not under age 17. However, they may qualify for the other dependent credit (ODC).
Q: Would a 20-year-old child of a taxpayer qualify for the ODC if they are not a full-time student?
A: It depends. If the taxpayer claims the child as a dependent under the qualifying relative rules, they may qualify for the ODC.
Q: Is it necessary to list the documents provided by the taxpayer on Line 5 of Form 8867, Paid Preparer’s Due Diligence Checklist?
A: Yes, if the paid preparer relied on any documents provided by the taxpayer to determine eligibility for, or the amount of, the CTC, the additional child tax credit (ACTC), or the ODC, they must list those documents on Form 8867, Line 5.
Q: Whose tax return does Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, go with – the custodial parent, the noncustodial parent or both?
A: Attach Form 8332 to the noncustodial parent’s tax return.
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 at natptax.com/explore.
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.
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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. All taxpayer circumstances are different, and NATP recommends contacting research services if you have specific questions about your clients’ tax situations.