The Child Tax Credit (CTC) is a tax credit that helps families reduce their tax bill by offering a credit for each qualifying child under age 17.
To qualify, the child must have a valid Social Security number, live with you for more than half the year, and be claimed as your dependent. The amount you can receive depends on your income, with the credit gradually reducing for higher-income taxpayers. The CTC is partially refundable, meaning it can lower your tax bill but may not always give you money back if your tax reaches zero. That’s where the Additional Child Tax Credit (ACTC) comes in. The ACTC allows you to receive a refund even if you don’t owe any taxes, as long as you meet the earned-income requirements. Both credits apply if they have low; older children only does not qualify for this credit, but may qualify for a smaller credit called Other Dependent Credit.
You must file a tax return to receive either credit. Together, the CTC and ACTC provide significant financial support for families raising children by lowering taxes and potentially increasing refunds.
The Other Dependent Credit (ODC) is a tax credit for taxpayers who support dependents who don’t qualify for the Child Tax Credit. This includes older children (age 17 and up), elderly parents, relatives you care for, or any qualifying person you financially support who meets the IRS rules. The credit is worth up to $500 per eligible dependent and is non-refundable, meaning it can reduce your tax bill but won’t give you money back if your tax reaches zero.
To qualify, the dependent must be a U.S. citizen, national, or resident alien; must not provide more than half of their own financial support; and must be claimed on your tax return.
Children in college may qualify for this credit if they meet the other dependency tests, such as a dependent must have a Social Security number or an ITIN; multiple people cannot claim the same dependent per year. The ODC is especially useful for families supporting older children or caring for aging family members, helping reduce the overall tax burden for households with dependents beyond young children.
For more information click in this link: IRS.gov