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What are the guidelines for taking the child tax credit?

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  1. Best Answer

    David Ghazaryan on Jan 14, 2013 Reply

    All right, the child tax credit is a credit that reduces your tax by as much as $1000 for each of your qualifying children. Now the additional child tax credit is a credit you might be able to take if you are not able to claim the full amount of the child tax credit.
    A qualifying child for purposes of the child tax credit is a child who:
    • Is your son, daughter, stepchild foster child, brother, sister, stepmother stepsister or a descendant of any of them ( for example, your grandchild, niece, or nephew)
    • Was under age 17 at the end of the year.
    • Did not provide over half of his or her own support for 2011
    • Lived with you for more than half of the year
    • Is claimed as a dependent on your return, and
    • Was a US citizen, a US national, or a US resident alien
    Exceptions to “time lived with you” condition:
    A child is considered to have lived with you for all of the tax year if the child was born or died during the tax year and your home was the child’s home for the entire time the child was alive. Temporary absences for special circumstances, such as for school, vacation , medical, military service or business count as time lived at home.
    There are also exceptions to the “time lived with you” condition for kidnapped children and children of divorced or separated parents.
    Adopted children:
    An adopted child is always treated as your own child. An adopted child includes a child lawfully placed with you for adoption.
    If you are a US citizen or a US national and your adopted child lived with you all year as a member of your household in 2011, that child meets condition above to be a qualifying child for the child tax credit.
    Amount of child tax credit:
    The maximum credit you can claim is $1000 for each qualifying child.
    Limits on credit:
    You must reduce your child tax credit if either (1) or (2) applies:
    1. The amount on form 1040, line 46 of form 1040A, line 28 is less than the credit. If this amount is zero, you cannot take this credit because there is no tax to reduce. But you may be able to take the additional child tax credit.
    2. Your modified AGI is above the amount shown below for your status.
    • Married filing jointly – $110, 000
    • Single, head of household or qualifying widower (er) – $75,000
    • Married filing jointly separately $55,000

    Phase out of credit
    You must reduce the maximum credit of $1000 per qualifying child by $50 for each $1000 or fraction of $1000 that your modified AGI exceeds the threshold for your filing status.
    Tax liability
    Your tax liability is zero then you cannot take this credit because there is no tax due. BUT, even if your tax is zero, you may be able to take the additional child tax credit on form 8812.
    The claim the child credit you need to either claim it on 1040A or 1040 ( the long form) , it may not be claimed on form 1040EZ.
    You must provide the name and the identification number (usually the ss #) of the child on your tax return to be able to claim the credit.
    Additional child tax credit:
    This credit is for certain individuals who get less than the full amount of the child tax credit. The additional child tax credit may give you a refund even if you do not owe any tax. The additional child tax credit is filed on form 8812.
    I hope this helps, do not hesitate to ask more questions should you have more questions!

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