How It Works

• The Child Tax Credit can give up to $1,000 to taxpayers who have a qualifying child. You calculate how much you can receive from the credit by filling out the 1040, 1040A or 1040NR tax forms. The amount you paid for dependent care expenses goes on line 48 on Form 1040, line 29 on Form 1040A or line 46 on Form 1040NR, and the amount you received from the Earned Income Credit goes on line 64 on Form 1040 or line 41a on Form 1040A. These calculations determine how much you will receive from the Child Tax Credit, which is applied to the amount you pay in federal income taxes. If the amount of taxes you owe is lower than the amount of Child Tax Credit you qualify for, you will only receive the lower amount. For instance, if you owe $500 in federal income taxes and qualify for $1,000 for the Child Tax Credit, only $500 will be applied to your return.
  
  

Eligibility

• You must pass several tests to qualify a child for the Child Tax Credit. For one, the child must be 16 years old or younger at the end of the tax year. He must be your biological child, adoptive child, sibling, step-sibling or a descendant of any of these relatives. This means that a grandchild or a grandnephew is eligible. You must have provided support for the child for more than half of the tax year and claimed him as a dependent on your tax return. The child also had to have lived with you for more than half the tax year.
  
  

Limitations

• While you can still receive the Child Tax Credit even if you only paid a small amount of taxes, there are income limitations on receiving it. Your modified adjusted gross income, as listed on your tax return, can't exceed a certain amount based on your filing status. If you are married filing a joint return, the phase-out amount for the Child Tax Credit is $110,000. If you are married filing a separate return, you don't qualify if your modified adjusted gross income is $55,000 or more. For head of household, the phase-out limitation amount is $75,000.
  
  

Additional Child Tax Credit

• If your Child Tax Credit has been applied to your tax return and you still owe income taxes, you may qualify for the Additional Child Tax Credit. The Additional Child Tax Credit has the same qualifying tests as the Child Tax Credit. It can only be claimed if the taxpayer still owes taxes after she has claimed the Child Tax Credit. Form 8812 must be filled out to see if you qualify for the Additional Child Tax Credit and how much you of it you can claim on your taxes.