As a parent or guardian, you might be wondering whether dependents in your family who go to college are entitled to the child tax credit. Lets know more about Will College Students Get The Child Tax Credit?
The answer is yes, for as long as they don’t go beyond the age of 24, the federal child tax support will be here to help parents, especially during these hard times of the pandemic. This program will now benefit parents that have dependent children with them. However, the amount of money allocated is based on the age of the children you have, as shown below:
- Children who are six years old or younger are entitled to $300 per month, which totals $3,600 per year.
- Children that are six years old up to 17 years are entitled to $250 per month, which totals to $3000 per year.
- College students from the age of 18 to 24 will be given a one-time payment of $500 every year.
Conditions for the Tax Credit
- The parents must make sure that they meet more than half of the expenses required for the child, and the child can be claimed as a dependent. The expenses include food, clothing, shelter, education, and health care. Also to note, as long as you have shown you take care of the child’s expenses, even if you have two of them in college, you can collect money for both of them once a year.
- live with the child claimed to be dependent for at least six months.
- You have to be resident in the United States of America for at least half a year.
- They must be your son or daughter, stepchild, stepbrother, or sister or relative only.
Key to Note
However, if a student provides more than half of his/her self-support, that is, if they buy their food, clothing, pay for health care, and accommodation, they do not qualify to be dependent on any family member or person.
Key to Note
Having dependents does not automatically qualify you for student tax credits unless you meet the following income thresholds: as a single filer, you must meet the $75, 000 threshold a year; as the head of the family, $144, 500; and as a married or joint family, your income per year must be $150,000. However, if your income is larger than the given threshold, your college tax credit will begin to diminish by $50 per every $1000 dollar over the threshold.
If you don’t file tax returns or claim non-filer, you can also get the college tax credit. The IRS has put up a provision for such people to fill in their information and apply for the college tax credit.
Do You Have to File Taxes On the College Tax Credit?
No, the student does not require to pay any taxes on that money. However, if they were contracted to do a job that earned them more than $12,000 or net income beyond $400.
How Do I Access the Credit Tax?
You can get it through direct deposit or check, but if you have previously opened a deposit with the revenue authority of America, (IRS), you can get the money directly into your bank account. If you did not sign up for any format of deposit, then you will get a check.
Benefits That May Come with Claiming College Student Dependents
You may enjoy some tax deductions, which can include education-related tax credits like the American Opportunity Tax Credit and the Lifetime Learning Credit. These can help you save thousands of dollars, which helps you pay tuition for your child.
IRS Rule On Claiming College Student as Dependent
Only one person/parent is allowed to claim them as dependents, regardless of whether or not the students need to file their tax returns for the jobs they did, amounting to more than $400.
Conclusion
With the rising tuition fees and the need for education, the last thing students need is to be pushed off their academic path due to a lack of enough tuition. Before you get to that point, it is only right that you apply for the college tax credit as long as you meet the IRS terms.
Common Questions
Do I have to Pay Back the Tax Credit?
No, you don’t have to pay back unless you claimed more than you deserve.
When is the College Tax Credit expiring?
It will start on July 15 and then continue every month until December, except for August 13.
Once we Have Sent Our Children to School, can we Still Claim Them as Dependents?
The answer is yes. You can claim them as dependents as long as they meet the IRS guidelines, are full-time students, and as long as you can prove that before they left for school you took care of more than 50% of their needs.