Question

Paul wishes to claim the CTC/ACTC by claiming his nephew, Jack, as a qualifying child dependent. Jack has an ITIN. Paul brings in Jack's middle school records showing that Jack's address is Paul's address. Assuming that all the CTC/ACTC eligibility requirements are met, what additional questions should the Tax Professional ask to meet the due diligence requirements for CTC/ACTC?

Answer 1

	Seven Requirements of CTC:
1	Age
2	Relationship
3	Support
4	Dependent Status
5	Citizenship
6	Length of Residency
7	Family Income
		1. Age test
		To qualify, a child must have been under age 17 (i.e., 16 years old or younger) at the end of the tax year for which you claim the credit.
		2. Relationship test
		The child must be your own child, a stepchild, or a foster child placed with you by a court or authorized agency. An adopted child is always treated as your own child. ("An adopted child" includes a child lawfully placed with you for legal adoption, even if that adoption is not final by the end of the tax year.)You can also claim your brother or sister, stepbrother, stepsister. And you can claim descendants of any of these qualifying people—such as your nieces, nephews and grandchildren—if they meet all the other tests.
		3. Support test
		To qualify, the child cannot have provided more than half of his or her own financial support during the tax year.
		4. Dependent test
		You must claim the child as a dependent on your tax return.Bear in mind that in order for you to claim a child as a dependent, he or she must: 1) be your child (or adoptive or foster child), sibling, niece, nephew or grandchild; 2) be under age 19, or under age 24 and a fulltime student for at least five months of the year; or be permanently disabled, regardless of age; 3) have lived with you for more than half the year; and 4) have provided no more than half his or her own support for the year.
		5. Citizenship test
		The child must be a U.S. citizen, a U.S. national or a U.S. resident alien. (For tax purposes, the term "U.S. national" refers to individuals who were born in American Samoa or in the Commonwealth of the Northern Mariana Islands.)
		6. Residence test
		The child must have lived with you for more than half of the tax year for which you claim the credit. There are important exceptions, however: A child who was born (or died) during the tax year is considered to have lived with you for the entire year.Temporary absences by you or the child for special circumstances, such as school, vacation, business, medical care, military services or detention in a juvenile facility, are counted as time the child lived with you. (There are also some exceptions to the residency test for children of divorced or separated parents. For details, see the instructions for Form 1040, lines 51 and 6c, or Form 1040A, lines 33 and 6c.)
		7. Family income test
		The child tax credit is reduced if your modified adjusted gross income (MAGI) is above certain amounts, which are determined by your tax-filing status. In 2017, the phase out threshold is $55,000 for married couples filing separately; $75,000 for single, head of household, and qualifying widow or widower filers; and $110,000 for married couples filing jointly. For each $1,000 of income above the threshold, your available child tax credit is reduced by $50.
		Once all this requirements are met than further this question shall arise
	Tax Professional should ask further this question:
		Whether your credit exceeds the tax liability ?	If Yes,then tax will become 0 and remaining unused credit is lost.However unused balance can be taken as Additional Child Tax Credit( ACTC) by Filing Form IRS 8812.