What is the Child Tax Credit?
What is the Child Tax Credit?
The child tax credit is for parents of children younger than age 17. To claim it, there are some requirements- for the qualifying child, for you the taxpayer, and there are also limits as to how much you can claim. In most cases, the procedure for claiming a child tax credit is the same as that for any other dependency exemption. The child has to be under 17 as of December 31, 2009, and they cannot have provided their own support during the year. Also, the child must have lived with you for more than half of the year, and they must be your biological or adopted/step child, grandchild, sibling, or stepsibling. The qualifying child must also be a citizen or a resident of this country. The amount that you can claim for your child tax credit is dependent on your tax liability, filing status, and adjusted gross income. The child tax credit isn’t for those that claim income of over $110,000 for a couple or $75,000 for a single taxpayer. If the credit is greater than the tax you owe, then you might be eligible for a refunded credit- the additional child tax credit. The Recovery Act of 2009 reduced the income threshold for claiming the refundable child tax credit, down from $12,550 to only $3,000. Again, the child tax credit amount isn’t allowed to exceed the amount of tax you owe. If you owe nothing, there is no child tax credit because there is no liability on your part. Thankfully, the additional child tax credit can help you if you cannot claim the full amount. If you aren’t eligible for the child tax credit, the additional credit can give you up to $1000 for each qualifying child. The additional child tax credit may be able to lower your tax liability below zero, and then you can get a refund for that amount. To qualify for the additional credit, your tax liability must be less than the child tax credit, and you must earn more than $11,750 for the year 2009. For more information, you should read IRS publication 972. | |