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The Child Tax Credit was created to give taxpayers a tax credit for having children less than 17 years of age. The tax credit gives taxpayers an opportunity an opportunity to lessen the income tax the taxpayer owed to the federal government by giving the family a federal tax credit. Each qualifying child can get a claim up to $1,000.
Qualifying Child
Not every child in the family can be eligible for the child tax credit. A taxpayer can apply and claim the tax privilege if:
The child tax credit is limited by two factors:
When applying for the child tax credit, a taxpayer needs to determine his or her earned income. This can be done by using a specific kind of tax worksheet offered by the IRS. The earned income only includes the taxable earned income and the nontaxable combat pay.
Additional Child Tax Credit
Some families may not get the full amount of the credit because of the above limitations. However, they may be eligible to get a refund even if they do not owe any tax to the IRS if they apply for the "additional child tax credit." The amount an individual can get from this refund is up to the maximum of $1,000.
Claiming the Child Tax Credit
The taxpayer can only use Forms 1040, 1040A, and 1040NR to claim the credit. Other income tax return forms are not applicable. When filing for the credit, a taxpayer should see to it that he or she submits the forms with each qualifying child's name and social security number as the identification number.
Qualifying Child
Not every child in the family can be eligible for the child tax credit. A taxpayer can apply and claim the tax privilege if:
- his or her son, daughter, stepbrother, stepsister, foster child, stepchild or a descendant of any of the mentioned group is under 17 years of age at the end of the tax filing year
- his or her child is a US citizen, a legal resident of the US, or a US national
- his or her child lived with the taxpayer for more than 6 months in the tax year
- his or her child did not provide over half of his or her own support for the year the income tax is filed
The child tax credit is limited by two factors:
- The amount of taxes owed by the taxpayer. If the sum total of taxes owed is zero, it means that there is no tax to reduce and therefore, the taxpayer cannot claim the credit.
- The taxpayer’s income. The child tax credit may not be claimed if the taxpayers modified adjusted income is above $110,000 for married status filing jointly, $75,000 for a person filing as single, head of household, or widow(er), and $55,000 for a married status filing separately.
When applying for the child tax credit, a taxpayer needs to determine his or her earned income. This can be done by using a specific kind of tax worksheet offered by the IRS. The earned income only includes the taxable earned income and the nontaxable combat pay.
Additional Child Tax Credit
Some families may not get the full amount of the credit because of the above limitations. However, they may be eligible to get a refund even if they do not owe any tax to the IRS if they apply for the "additional child tax credit." The amount an individual can get from this refund is up to the maximum of $1,000.
Claiming the Child Tax Credit
The taxpayer can only use Forms 1040, 1040A, and 1040NR to claim the credit. Other income tax return forms are not applicable. When filing for the credit, a taxpayer should see to it that he or she submits the forms with each qualifying child's name and social security number as the identification number.
