When Does Child Tax Credit Disappear?

This is it.  Only one more year until your dependent is 18 and can legally move out on their own.  You've been counting down these moments since they turned 14 and started clearing out your fridge on a weekly basis.  But just as any teenager does, they are going to hit you with one last gut punch before they ride off into their own lives. 

The Child Tax Credit (CTC) was formally introduced to the tax code in 1998.  It has evolved into one of the most lucrative reasons to have a child this day and age (some might say the only reason).  Starting in 2018 the CTC jumped up to $2,000 and is claimable to all parents, caregivers, and guardians as long as they are providing half the support and meet other tests to qualify. 

But while your child may forever be 8 years old in your eyes, the IRS sees them much differently. In the eyes of the IRS they reach adulthood at the age of 17 and the formally amazing tax return you used to have, just jumped off a cliff.  

That's right, if they can see an R rated movie without parental permission, they no longer qualify for child tax credit.

But what if my child turned 17 on December 29th, isn't there a partial credit?

NOPE. There are no partial credits for the CTC.  Even though your child is eating more and costing you more than ever, they are now reduced to a $500 credit instead of $2,000 like they were the year before.  

You might be thinking, "Maybe I will change their DOB on the tax return and see if it slides under the radar?" 

The IRS database matches the birth year with each child and corresponding Social Security Number so while it may seem like a good idea to you (and by they way, this was a terrible, terrible idea), the return will almost immediately be rejected. 

In summary, yes your 17 year old is in the most expensive year of their life but the government is valuing them 75% less than they did the year before. 

But cheer up, that $200,000 ivy league school they just got into will save you $2,500 for the next four years after they graduate high school. Whenever the IRS closes a door, they crack a very small window.