What's the difference between the child tax credit and a dependent exemption?
An exemption will directly reduce your income. A credit will reduce your tax liability.
A dependent exemption is the income you can exclude from taxable income for each of your dependents. In 2017, you can exclude "$4,050" for each dependent.
The child tax credit:
- Is a credit that offsets the tax you owe dollar for dollar
- Is available if you have a child younger than age 17 at the end of the year
- Can reduce your tax by as much as $1,000, (2003 – 2017, through the Working Families Tax Relief Act) for each qualifying child
You can only claim the child tax credit if you claim the child as a dependent.
If you meet the requirements, you can claim an exemption for a dependent on your return and the child tax credit for that dependent.
Learn the tax implications of the first time home buyer tax credit and if you need to repay it from the tax experts from H&R Block.
Learn whether you can claim the earned income tax credit if you are married and filing separately with advice from the tax experts at H&R Block.
Learn more about the process of claiming the low-income housing credit and get tax answers at H&R Block.
Learn more about eligibility for the American Opportunity Tax Credit with advice from the tax experts at H&R Block.