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 2018, you can exclude $4,150 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 – 2018, 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.
Can you claim your adult child as a dependent? Learn about dependent requirements and get tax answers from H&R Block.
Discover the medical deduction limits with advice from the tax experts at H&R Block.
What are the qualifications for the retirement savings contribution credit or savers credit? Learn more from the experts at H&R Block.
Learn more about which items on the HUD-1 form you can claim as tax deductions with advice from the tax experts at H&R Block.