Age Limitations for 3 key Child Tax Deductions

Several key tax credits end when dependent children reach a particular age. Here is a quick summary of the age rules for three of the most important tax credits for parents, as well as the most important exceptions:

Child and Dependent Care Credit: Child must be under 13 years of age (12 years old or younger), OR live with you more than half the year and be incapable of self-care.

[The Child and Dependent Care Credit is 20% to 30% of up to $3,000 of child care and similar costs for a child under 13 and up to $6,000 of expenses for two or more dependents. To qualify you must provide at least 50% support during the last year, the child must have lived with you 50% of the year, and generally you must claim your child as a dependent on your tax return. Also, to qualify the person who provides the child care cannot be your dependent or spouse]

Child Tax Credit (also called “Per-Child Credit”): Child must be under 17 years of age (16 years old or younger).

[The Child Tax credit is up to $2,000 per qualifying child and $500 per qualifying dependent. To qualify they must also be your own child, a step child or a foster child placed with you by a court or authorized agency. Also to qualify your modified AGI must be under $400,000 (married filing joint), $200,000 (everyone else), you must provide at least 50% support during the last year, the child must have lived with you 50%  of the year, and the child cannot file a joint return]

Qualifying Child for the Earned Income Tax Credit (EITC): Child must be under 19 years of age (18 years old or younger), OR a full-time student and under 24 years of age (23 years old or younger).

[The Earned Income Credit is $3,526 for one qualifying child, $5,828 for two qualifying children, $6,557 for three or more qualifying children. To qualify the AGI limit is $40,320 for 1 child, $45802 for 2 children, $49,194 for 3 or more children]

For both the Child Tax Credit and the Qualifying Child for EITC rule, the child must meet the age requirement at the end of the tax year (usually, December 31). However, for the Child and Dependent Care Credit, the child only has to be below the age limit when the care is provided.

If you will lose a tax credit this year due to a child surpassing the age limit, you may need to adjust your withholding to allow for the likely increase to your total tax for the year. A qualified tax advisor can help you determine whether an adjustment is needed.

Young Adult Health Insurance Coverage: Under current law you can add or keep children on your health insurance policy until they turn 26 years of age even if they are not financially dependent on you.