Chapter 35 Child tax credit
IRS Publication 17 (
Your Federal Income Tax) has been updated by Ernst & Young LLP for 2014. Dates and dollar amounts shown are for 2014. Underlined type is used to indicate where IRS text has been updated. Places where text has been removed are indicated by the sentence: Text intentionally omitted.
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The child tax credit is a credit of up to $1,000 for each qualifying child under age 17. A qualifying child (defined in greater detail in
, chapter 3 Personal exemptions and dependents) is an individual for whom the taxpayer can claim a dependency exemption and who is the child, stepchild, or eligible foster child of the taxpayer or is a brother, sister, stepbrother, or stepsister of the taxpayer or a descendant of any of these relatives (“brother” and “sister” include a brother or sister by half-blood). That means a “qualifying child” doesn’t necessarily have to be your child!
The child tax credit is phased out depending on your adjusted gross income and the number of qualifying children. While the child tax credit is nonrefundable, meaning the credit is limited to the amount of the tax liability on the return, there are certain cases in which you may be able to receive a refund when the child tax credit exceeds your tax liability. This refundable portion of the child tax credit is called the additional child tax credit.
The child tax credit is the largest tax code provision benefiting families with children. Be careful not to confuse the child tax credit with the credit for child and dependent care expenses, which is explained in
, chapter 33 Child and dependent care credit.
The child tax credit is a credit that may reduce your tax by as much as $1,000 for each of your qualifying children.
The additional child tax credit is a credit you may be able to take if you are not able to claim the full amount of the child tax credit.
This chapter explains the following.
Who is a qualifying child.
The amount of the credit.
How to claim the credit.
The child tax credit discussed in this chapter should not be confused with the child and dependent care credit discussed in
. They are completely different credits with different requirements. It may be possible, however, to qualify for both credits. chapter 33
If you have no tax. Credits, such as the child tax credit or the credit for child and dependent care expenses, are used to reduce tax. If your tax on Form 1040, line 47, or Form 1040A, line 30, is zero, do not figure the child tax credit because there is no tax to reduce. However, you may qualify for the additional child tax credit on line 67 (Form 1040) or line 43 (Form 1040A).
You may want to see:
972 Child Tax Credit
Child tax credit. A tax credit of up to $1,000 is available for every eligible child you have who is under the age of 17. A credit is much better than a deduction; it reduces your tax liability dollar for dollar, while a deduction only reduces your taxable income. The actual credit you can claim depends on your modified adjusted gross income (MAGI). Once your MAGI exceeds $110,000 (married, filing jointly); $75,000 (single, head of household, or qualifying widow(er)); or $55,000 (married, filing separately) you have to reduce the credit you can claim.
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