Can You Claim the Child Tax Credit Married Filing Separately?
Filing separately while married has distinct rules for the Child Tax Credit. Understand the specific IRS requirements that can allow you to claim this valuable credit.
The Child Tax Credit is a tax benefit designed to assist families with the costs of raising children. However, its application can become complicated for those who are married but choose to file their taxes separately. This article focuses on the specific rules and exceptions for married individuals filing separate returns, which requires careful navigation of IRS regulations.
Qualifying Child Requirements for the Credit
Before considering filing status, a child must meet seven tests to be a “qualifying child” for the Child Tax Credit. The child must have been under age 17 at the end of the tax year. The relationship test requires the child to be your son, daughter, stepchild, eligible foster child, brother, sister, or a descendant of these individuals, like a grandchild or niece.
The child must have lived with you for more than half the year and cannot have provided more than half of their own financial support. The child must be a U.S. citizen, U.S. national, or a U.S. resident alien. Finally, you must claim the child as a dependent, they cannot file a joint return unless only for a refund, and they need a valid Social Security number.
Special Eligibility Rules for Married Filing Separately
Generally, taxpayers who use the married filing separately status are not eligible to claim the Child Tax Credit. The IRS regulations are structured to prevent a couple from receiving a larger total credit by filing separately than they would by filing a joint return.
An exception exists for married individuals considered “unmarried” for tax purposes under the “lived apart” test. To qualify, you must have lived apart from your spouse for the last six months of the tax year, from July 1st through December 31st.
You must also have paid more than half the cost of keeping up the home for the year. This home must have been the main residence of the qualifying child for more than half of the year. If these conditions are met, the IRS may allow you to be treated as unmarried for the purpose of claiming the credit.
Calculating the Credit with MFS Status
For a married filing separately taxpayer who meets the “lived apart” requirements, the calculation of the Child Tax Credit follows specific income rules. The maximum credit is $2,000 per qualifying child, but this amount is reduced based on your modified adjusted gross income (MAGI).
The credit begins to phase out when a taxpayer’s MAGI exceeds $200,000, compared to the $400,000 threshold for joint filers. For every $1,000 of income above these thresholds, the total credit is reduced by $50.
A portion of the credit may be refundable through the Additional Child Tax Credit (ACTC), meaning you may receive a refund even if you owe no income tax. The refundable portion is calculated as 15% of earnings over $2,500. For the 2024 tax year, the maximum refundable amount is $1,700 per child.
How to Claim the Credit on Your Tax Return
Claiming the Child Tax Credit requires Form 1040 and Schedule 8812, Credits for Qualifying Children and Other Dependents. Schedule 8812 is used to calculate and claim the credit, replacing the now-obsolete Publication 972.
On Schedule 8812, you will list the name, Social Security number, and relationship for each qualifying child. It is on this schedule that a married individual filing a separate return must indicate they meet the special conditions to claim the credit.
A specific checkbox is provided on Schedule 8812 for married filing separately taxpayers who meet the “lived apart” test. After completing Schedule 8812, the calculated credit amount is transferred to the appropriate line on Form 1040 to reduce your tax liability or contribute to your refund.