Child Tax Credit: What Happens When Your Child Turns 17?

As your child approaches adulthood, the Child Tax Credit (CTC) that has been helping with your family’s expenses gradually disappears. When your child turns 17, you can no longer claim this credit, which might feel like a financial setback.

But don’t worry there are other ways to manage this change and still get the financial support your family needs. Here’s a quick guide to help you understand what happens next.

What is the Child Tax Credit?

The Child Tax Credit is a financial benefit for parents to help with the costs of raising children. To qualify for the CTC, there are a few key requirements:

Income Limits: For married couples filing jointly, the income must be less than $400,000. For single parents or couples filing separately, the limit is $200,000.
Age of the Child: Your child must be under 17 during the year to qualify for this credit.
Relationship: The child must be your biological child, stepchild, foster child, sibling (or step/half-sibling), or even a grandchild or nephew.
Residency: The child must live with you for at least half the year.
Social Security Number (SSN): The child needs to have a valid SSN and must be listed as your dependent on your tax return.

Once your child turns 17, you won’t be able to claim this credit anymore. However, there are some exceptions and alternatives to consider.

As your child turns 17, consider how recent changes could impact the tax benefits you’re entitled to, such as the new Child Tax Credit for New York.

Exceptions to the Age Limit

If your child has a qualifying disability, you might still be eligible for extra financial support after they turn 17. Here’s what that means:

The disability should be permanent or expected to last at least a year.
It should limit one or more important life activities, such as walking, speaking, or learning.
You’ll need medical documentation to prove the disability.

If you are caring for an adopted child or a non-biological child, there are specific credits available for you under different IRS rules.

Other Tax Credits for Older Children

When your child turns 17, other tax benefits may open up. Here are some you can explore:

Credit for Other Dependents: You can claim $500 for children aged 17 or older.
American Opportunity Tax Credit (AOTC): If your child goes to college, this credit can help with tuition and other school costs.
Lifetime Learning Credit (LLC): This credit can be used for tuition at universities or for students going back to school.
Child and Dependent Care Credit: If your child has a disability, this helps with childcare expenses while you work.
Earned Income Tax Credit (EITC): This is for low-income families with children and can be a refund, depending on your income.

If you’re concerned about losing the Child Tax Credit when your child turns 17, find out how families living abroad can claim the Child Tax Credit to maintain financial support.

Planning for Your Child’s Future

As your child turns 17, it’s important to plan ahead for their future. Here are a few things you can do to ensure they have a smooth transition:

Adjust your Budget: Losing the CTC can affect your finances, so it’s a good idea to plan ahead. Start building an emergency fund, and consider looking for extra ways to earn money.
Invest in Education: If your child plans to attend college, make sure you take full advantage of education-related tax credits and scholarships.
Get Professional Advice: Navigating tax changes can be confusing. A tax advisor can help you make the best decisions for your family’s future.

For Non-Resident Parents

If you live outside the U.S., you can still claim the CTC, but there are extra requirements:

The child must live in the U.S. for at least half the year and have a valid SSN.
You must be married and file a joint tax return with your spouse, even if you live abroad.