What is the Child Tax Credit?

January 19, 2014 by in category Taxes tagged as with 0 and 0
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As wonderful as it is to have children and expand your family, it can be very expensive to take care of them. While nothing can replace the thousands of dollars you spend each year, the government does offer you some leniency in the form of the Child Tax Credit. And the more children you have, the more money you can save.

Who Can File for It?

Anyone who has a qualifying child or children can file for the Child Tax Credit.

What Qualifies as a Child?

While some people may look at their pets as children, the government unfortunately does not see it that way. A qualifying child is one that you can claim as a dependent on your taxes. This dependent must meet all of the following criteria. He/She must:

  • Be your son, daughter, foster child, step-sibling, step-child, sibling, or descendant of any family member listed prior.
  • Be under the age of 17 at the end of the last tax year.
  • Have not contributed more than half of their own support for the tax year being filed for.
  • Have been a U.S. Citizen, resident, or U.S. National.

What is the Maximum I Can Claim?

The good news is that it doesn’t matter how many children you have, so long as they are considered qualifying children, you can claim them all.

The maximum you can reduce your taxable income by is $1,000 per child. So, to be clear, that means you will not get a straightforward $1,000 back from the government. Only the amount that the government taxes you on will be reduced by $1,000 per child.

In addition, if you meet certain criteria, you will have to lower the amount you claim. If any one of these is true of your modified adjusted gross income (AGI), you may have to reduce your amount. You make more than:

  • $110,000 per year if you are married and filing jointly
  • $75,000 per year and are single, a qualifying widow(er), or head of household
  • $55,000 per year if you are married but filing separately

Can I Still Get a Refund if I Don’t Have Any Taxable Income?

It is possible for some individuals to still get a refund even if they don’t get a full reduction of their taxes from the child tax credit or don’t owe taxes at all. There is something called the Additional Child Tax Credit which you can see if you qualify for.

How Do I File for It?

You’ll need to use either Form 1040 or 1040A to file for these. You will also be required to provide the social security number for each qualifying child.

The Child Tax Credit is an excellent opportunity to reduce your taxable income so you can save money at tax time. Before you claim your credit(s), make sure that you have children who meet the criteria, so you can safely receive a return on your family investment. For more information on any of the Child Tax Credit, please visit the IRS publication 972.

Sources: http://www.irs.gov/publications/p17/ch34.html

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