This is a type of tax credit. So, it should not be confused with a tax deductible. So, when you are filing for tax returns, you can take out this amount directly from the taxes you owe. You have to indicate the number of dependent children you have when you file for returns. In case you have two children, then you are entitled for $2,000. Also, this type of tax credit does not have an effect on the other exemptions you may take for your children. This credit is besides all the other exemptions you may take. However, there is a criterion for qualifying your dependent children to qualify for the credit. The dependent child must be a citizen of the United States, resident, son or daughter of a legal US citizen, or a grandchild or adopted child of a US citizen.
The children are recognized by their individual tax identification number called the ITIN. So you need to make sure that your child has one.
People, who are not citizens of the US, but are working in the country with a valid work visa, are also eligible for the tax credit on their dependent children under the age of seventeen.
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