The Child Tax Credit is a tax relief for parents and guardians who look after children who qualify under the provisions of the tax program. These tax credits are deducted from the taxpayers’ total amount of taxes to be paid to the Federal government. Basically, the Child Tax Credit reduces tax liability.

To be qualified in the child care credit exemption, an applicant must have at least one qualifying child and must generate income under a certain limit, depending upon the applicant’s tax filing status (e.g., single, married, filing jointly, etc.).

A child can only be pronounced as a qualifying child if he or she satisfies all of the following:
• The child is under the age of 17 at the end of the year;
• The child is the taxpayer’s son, daughter, grandchild, legally adopted child, stepchild, eligible foster child, sister, brother, stepsister, stepbrother, or a descendant of any of the above;
• The child has lived in the same residence as that of the taxpayer for more than half of the taxable year, except for absences due to illness, education, business, vacation, or military service.

The child care credit is a big help to families who have qualified children living with them as this would mean greatly reducing their tax liabilities. The Child Tax Credit will also enable families to save money for other pressing matters and needs.