The Child Tax Credit typically applies to children under 17, but there are additional tax benefits for caring for disabled dependents over 17, such as the Earned Income Tax Credit. The EITC is designed to prevent a poverty trap by gradually phasing out the credit as income rises to support work incentives.
Understanding Child Tax Credit for Disabled Children Over 17
The question pertains to the eligibility criteria of the Child Tax Credit (CTC) for a disabled child who is over the age of 17. While the Child Tax Credit saw significant changes under the American Rescue Plan introduced in 2021, which increased the amount of credit and allowed for monthly disbursements, there can be special considerations for qualifying individuals with disabilities. It should be noted that for the purpose of CTC, a qualifying child includes individuals under 17 years old. However, there are different tax benefits available for those caring for disabled dependents over the age of 17, such as the Earned Income Tax Credit (EITC) or other deductions and credits related to dependents with disabilities.
Concerns about the poverty trap have been addressed with the design of the EITC, where the credit doesn't start phasing out immediately as income increases but does so at a gradual rate, thus minimizing the benefit reduction as earnings rise above a certain threshold. This design helps in supporting continued work incentives without causing an abrupt loss of benefits.