Surprize! Child tax credit disappears at 17 this year

[librechik]

I was able to declare my full-time student child a dependent until he was 24. What's the deal? Two of my relatives are suffereng because their kids turned 17 last year.

Thanks for correction poster #1

[Bunny]

1. Not the deduction. Just the $1000 tax credit.

[redwitch]

2. Older if they are students????

Please!?

Never mind, I looked it up. Whew!

[librechik]

3. well, I did support him completely since he didn't take a job.

And it was legal in the tax code. Poor people need tax breaks too!

[librechik]

5. oh, thx for the details. I knew it was $1000., that's all n/t

[karynnj]

4. Your relative is wrong

Here is the 2010 IRS document for the child deduction. http://www.irs.gov/publications/p501/ar02.html#en_US_2010_publink1000220886
(This is for taxes for the year 2010)
Here is the pertinent part:

o meet this test, a child must be:

*

Under age 19 at the end of the year and younger than you (or your spouse if filing jointly),
*

A full-time student under age 24 at the end of the year and younger than you (or your spouse if filing jointly), or
*

Permanently and totally disabled at any time during the year, regardless of age.

[librechik]

7. thx, I'll have them re-check their options! n/t

[karynnj]

10. looking at other comments -

They do lose the child tax credit - which will cost them $2,000 with 2 falling off. (But they keep the deduction)

[Godhumor]

12. Child tax credit has always been at 17, it is not a new change

So, yes, they're losing it because kids are over 17 but, they're not losing it because of policy change.

Not sure if the second is what you were actually implying, but figured I'd post, just in case.

[karynnj]

15. exactly

Thanks for your clarification - it is important to note that this is not a change.

[uppityperson]

6. No, it doesn't. What are you talking about because I see the deduction for

child up to 24 if a full time student?

[librechik]

8. yes, that's what I thought too--must have them go back and see if they made an error

[Godhumor]

9. Under 17 is the qualifying child rules for the "Child Tax Credit" only

And that has not changed since it was enacted in 1997.

[librechik]

11. thanks, all for the clarification! n/t

[haele]

13. It's been that way since the 90's -

We ran into that two years ago. You're supposed to go through every word of your 1040 instructions every year to keep reminding yourself and you're screwed if you use Turbotax or have the storefronts do your taxes where you don't get any warning at all that your kid loses the tax credit at if he or she turns 17. Especially as there's no warning notification from the IRS after you submit your returns the year the kid turns 16 to let you know to start taking one less exemption out of your taxes that year.
I suppose the IRS supposes the kid's going to be getting supplementary income with a some sort of traditional part time job at 16 or 17 (like baby-sitting or lawn service - one that won't make enough to cross their radar, but will make up for the tax credit to the parents), but parents still have a lot of expenses all the way through High School into college.
I could never understand that if one is legally a minor until 18 and the parents are responsible for that child's "financial expenditures" and contractural obligations until then, why the credit would disappear the year before the child became a legal adult.

Luckily, you can still deduct your child even if you lose a tax credit - which can be hard just as you're ramping up your spending for the kid's senior year or preparing for college. Of course, if you spend enough, you can take the education and medical spending for your dependant off your taxes if they don't have a full-time job that pays enough for them to move out. That can help a little, but usually won't start helping you (or your relatives) until the kid actually starts college and has already incurred the costs.

The worst part of losing the credit is that a credit has a significantly different effect on your taxes and returns than a deduction; a $1000 tax credit is the equivalent of deducting between $5K to $10K off your income whether you have enough deductible costs to itemize or use the standard deduction; deductible expenses only come into play if they are significant enough that your standard deduction is less.
Losing that a child credit can hurt the majority of families at the $30K - $80K income level. But -
I know that in the big scheme of things, that doesn't matter; government's business should be about the big things like the welfare of the American Business environment...families are fungible. They're just consumers.
:sarcasm:

Haele

[Statistical]

14. Child deductions vs Child Tax Credit.

Family can take child deduction for children up to age 17 (24 if in school) as long as they are financially dependent on their parents.

However the child tax CREDIT ($600 raised to $1000 per child) is only for children up to age 17.

[sad sally]

16. Notice that the first $2,400 of unemployment tax exemption expired

as did the property tax deduction (up to $1,000) for those filing short form. No more handouts for the "little people."

Maybe Exxon will get a bigger refund!