| What is the child tax credit? | Top |
This credit is for people who have a qualifying child. A qualifying child for purposes of the child tax credit must be all of the following.
o Claimed as your dependent on Form 1040 or Form 1040A.
o Under age 17 at the end of the tax year.
o Your: Son, daughter, adopted child, stepchild, or a descendant of any of them (for example, your grandchild); Brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your niece or nephew), whom you cared for as you would your own child; Foster child (any child placed with you by an authorized placement agency whom you cared for as you would your own child).
o A U.S. citizen or resident alien.
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| Does the Form 8332 (used to release the exemption to the noncustodial parent) affect the Child Tax Credit? | Top |
Yes. The Child Tax Credit can only be claimed by the parent claiming the exemption. In this case the noncustodial parent would qualify for the dependency exemption and therefore the child tax credit.
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| My daughter did not turn 17 until March 24th. Why am I not receiving a child tax credit? | Top |
| The child must also be your son, daughter, adopted child, stepchild, or a descendant of any of them (for example, your grandchild); brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your niece or nephew), whom you cared for as you would your own child; or foster child (any child placed with you by an authorized placement agency whom you cared for as you would your own child). |
| Why did I get the EIC but not the child tax credit this year on my tax return? | Top |
| There are a couple of reasons why you could qualify for EIC but not for the child tax credit. One, you child could be over 17, therefore disqualifying you for the credit. Two, if you did not have any taxes owed after the standard deduction and exemptions, then you would not get the child tax credit. The child tax credit reduces the amount of tax that you owe; if you don’t owe any there is nothing to reduce. The earned income credit is a refundable credit, as long as you qualify for it you will get it whether you still owe tax or not. |
| My ex-wife is claiming my son as a dependent this year. Can I still claim him for the Child Tax Credit? | Top |
No, only the parent who is claiming the exemption can claim the Child Tax Credit.
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| What is the Additional Child Tax Credit? | Top |
| The additional child tax credit allows a portion of the child tax credit to be refundable for certain taxpayers. Taxpayers who have more than $10,570 of earned income must complete Form 8812 to compute the refundable portion of the credit. For taxpayers with one or more qualifying children, the additional child tax credit is the smaller of: 1. The amount of the child tax credit remaining after reducing regular tax and alternate minimum tax to zero, or 2. 10% of the taxpayer’s earned income in excess of $10,570. The percentage will increase to 15% beginning in 2005. For taxpayers with three or more qualifying children, the additional child tax credit is the greater of: 1. The result of the above calculation for all taxpayers with one or more qualifying children, or 2. The taxpayer’s employee share of federal insurance contributions ability (FICA) taxes (plus one-half self-employment-SE-tax liability, if any) in excess of the earned income credit (EIC), limited to the amount of the child tax credit remaining after reducing regular tax and alternate minimum tax to zero. |
| What is the maximum amount I can receive for the Additional Child Tax Credit? | Top |
| You could receive up to $1,000 per child. This is a partially refundable credit, which means even if you owe no federal income tax, you may even be entitled to a refund. |
| Are there any special forms I need to fill out in order to claim the Additional Child Tax Credit? | Top |
| Form 8812 must be completed and attached to Form 1040 to figure and claim your Additional Child Tax Credit. |
