What the Form Is For

For the 2020 tax year, the Child Tax Credit (CTC) and Additional Child Tax Credit (ACTC) helped families with qualifying children reduce their tax burden or receive a refund. The credit was claimed directly on Form 1040 (U.S. Individual Income Tax Return), with Schedule 8812 used specifically for the Additional Child Tax Credit portion when applicable.

The Child Tax Credit provided up to $2,000 per qualifying child under age 17, while the Additional Child Tax Credit offered a refundable component—meaning you could receive money back even if you owed no taxes—worth up to $1,400 per child. The Credit for Other Dependents (ODC) provided up to $500 for dependents who didn't qualify for the main child credit, such as older children age 17 or 18, or other relatives you supported.

These credits were designed to provide financial relief to families raising children, acknowledging the significant expenses involved in childcare, education, and daily living costs. Unlike deductions that merely reduce your taxable income, these credits directly reduced the amount of tax you owed, dollar for dollar.

When You’d Use It (Late or Amended Returns)

Most taxpayers claimed the Child Tax Credit when filing their original 2020 tax return by the April 15, 2021 deadline. However, you might need to file late or amend your return in several situations.

If you missed the original deadline but never filed a 2020 return, you could still file late to claim your refund. The IRS generally allows three years from the original due date to claim a refund, meaning you had until April 15, 2024, to file a 2020 return and claim these credits. While there's no penalty for filing late when you're owed a refund, delaying means you go longer without money that belongs to you.

Amended returns using Form 1040-X became necessary when you discovered errors after filing your original return. Common reasons included realizing you forgot to claim a qualifying child, receiving a corrected Social Security number for a dependent, or discovering you were eligible for the Additional Child Tax Credit but didn't claim it initially. However, if your Child Tax Credit was previously denied or reduced (except for simple math errors), you needed to attach Form 8862 to prove eligibility before claiming the credit again.

Key Rules

Several critical requirements determined eligibility for the 2020 Child Tax Credit. Understanding these rules prevented claim denials and processing delays.

Qualifying Child Requirements

Your qualifying child had to meet seven specific conditions. The child must have been your son, daughter, stepchild, foster child, sibling, or descendant of any of these (like a grandchild or niece). They had to be under age 17 on December 31, 2020—turning 17 during 2020 meant they didn't qualify for the CTC but might qualify for the Credit for Other Dependents instead.

The child couldn't have provided more than half their own support during the year and must have lived with you for more than half of 2020. Temporary absences for school, vacation, medical care, or military service counted as time living with you. You had to claim the child as a dependent on your return, they couldn't file a joint return (unless only to claim a refund), and they had to be a U.S. citizen, national, or resident alien.

Social Security Number Rules

The Social Security number requirement was particularly strict. Each qualifying child needed a valid SSN issued before the tax return's due date (including extensions). An SSN marked "Not Valid for Employment" or an Individual Taxpayer Identification Number (ITIN) didn't qualify for the CTC or ACTC, though you might claim the $500 Credit for Other Dependents instead.

Income Limits and Phase-Outs

Income limits also applied. The full credit began phasing out when your modified adjusted gross income exceeded $200,000 for single filers or $400,000 for married couples filing jointly. The credit reduced by $50 for every $1,000 of income above these thresholds.

Additional Child Tax Credit Requirements

For the Additional Child Tax Credit specifically, you needed at least $2,500 in earned income. This refundable portion was calculated as 15% of your earned income above $2,500, up to $1,400 per qualifying child. Alternatively, families with three or more qualifying children could calculate the credit using their Social Security and Medicare taxes paid if that resulted in a larger refund.

Step-by-Step (High Level)

Claiming the Child Tax Credit on your 2020 return followed a straightforward sequence, though it required careful attention to detail.

Step 1: Gather Dependent Information

First, you gathered essential information for each qualifying child: their full name, Social Security number, relationship to you, and confirmation they met all seven qualifying conditions. You entered this information in the Dependents section of Form 1040, making sure to check the "Child tax credit" box in column 4 for each qualifying child, or the "Credit for other dependents" box for dependents who didn't meet all CTC requirements.

Step 2: Complete the CTC/ODC Worksheet

Next, you completed the Child Tax Credit and Credit for Other Dependents Worksheet found in the Form 1040 instructions. This worksheet walked you through calculating your credit amount based on:

• number of qualifying children
• tax liability
• income level

You multiplied your number of qualifying children by $2,000 and added $500 for each other dependent to get your initial credit amount.

Step 3: Compare Against Tax Liability

The worksheet compared this amount against your tax liability and applied income phase-outs. This gave you the non-refundable Child Tax Credit for Form 1040, line 19.

Step 4: Complete Schedule 8812 (If Needed)

If your worksheet results showed you could qualify for the Additional Child Tax Credit, you completed Schedule 8812. This form included parts for:

• earned income
• taxpayers with three or more children
• final refundable credit amount

Step 5: Enter Final ACTC Amount

Finally, you entered your Additional Child Tax Credit from Schedule 8812, line 15, onto Form 1040, line 28.

Common Mistakes and How to Avoid Them

Several frequent errors caused claim denials, processing delays, or reduced credit amounts.

Claiming Ineligible Children

Parents often forgot that children who turned 17 in 2020 didn't qualify for the CTC. Also, children without valid SSNs couldn't be claimed for CTC or ACTC, though they might qualify for the ODC.

Incorrect Residency Claims

Some taxpayers misapplied the residency requirement. Temporary absences counted as living with you; otherwise, you needed agreements or court orders to claim the child.

SSN Entry Errors

Mistyped SSNs caused automatic processing delays or denials. Incorrect spelling or mismatched names also triggered reviews.

Earned Income Calculation Errors

Some taxpayers:

• used incorrect income types
• missed nontaxable combat pay
• miscalculated self-employment income

Duplicate Dependent Claims

Divorced or separated parents sometimes both tried claiming the same child. Form 8332 was required for noncustodial parents to claim the credit.

What Happens After You File

Understanding the post-filing process helped set expectations.

IRS Processing Timeline

Returns claiming ACTC or EITC faced mandatory delays until mid-February 2021 to allow fraud prevention checks.

Verification Checks

IRS systems checked for:

• SSN matches
• duplicate dependent claims
• income and credit calculation accuracy

Refund Status Updates

You could check your refund using Where’s My Refund? 24 hours after e-filing or four weeks after mailing. Refund stages included:

1. Return received
2. Refund approved
3. Refund sent

IRS Notices and Letters

Common notices:

• CP12 — Changes made
• 12C — Request for documentation
• 105C — Proof of relationship or residency needed

Denials and Appeals

If denied, you could appeal and provide:

• birth certificates
• school or medical records
• residency proofs

Severe errors could trigger 2-year or 10-year bans.

FAQs

Can I claim the Child Tax Credit if my child turned 17 in 2020?

No, your child must have been under age 17 on December 31, 2020. If your child turned 17 at any point during the year, they didn't qualify for the CTC or ACTC. However, you could claim the $500 Credit for Other Dependents if all other requirements were met.

What's the difference between the Child Tax Credit and the Additional Child Tax Credit?

The Child Tax Credit is non-refundable. The Additional Child Tax Credit is refundable—up to $1,400 per child—and can be paid even if you owe no taxes.

My child doesn't have a Social Security number yet—can I still claim them?

You need a valid SSN issued before your return's due date to claim CTC or ACTC. Without an SSN, you may claim the $500 Credit for Other Dependents.

Can divorced parents both claim the Child Tax Credit for the same child?

No. Only one parent can claim the child per year. The custodial parent usually has priority unless Form 8332 is signed to release the claim.

How much do I need to earn to get the Additional Child Tax Credit?

At least $2,500 in earned income. The refundable amount equals 15% of earnings above $2,500, up to $1,400 per qualifying child.

What if I forgot to claim the Child Tax Credit on my original 2020 return?

You can file Form 1040-X to amend your return. For 2020 returns filed on time, the deadline was April 15, 2024.

I used my 2019 income to calculate my 2020 tax—can I also use 2019 earned income for the Additional Child Tax Credit?

Yes. Special 2020 pandemic rules allowed electing 2019 earned income for ACTC calculations. You noted “PYEI” and the 2019 amount next to line 28 on Form 1040.

Sources: All information comes from official IRS sources including the 2020 Form 1040 instructions, Schedule 8812 instructions, Publication 972, and the IRS Child Tax Credit information page.

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