About Child Tax Relief
The Child Tax Credit is a direct reduction in the amount of federal income tax owed by individual, joint or head-of-household filers. The credit was originally passed by Congress for the 1998 tax year, and was set at $400 per qualifying child. The amount of the credit has steadily risen since that time. For the 2009 tax year, the credit amounted to $1,000 per qualifying child.
Qualifications
To qualify for the credit, each child must be under 17 at the end of the tax year. The child must be the son, daughter, brother, sister, stepchild, stepbrother, stepsister, foster child or adopted child of the tax filer. A child living in the household who is the son or daughter of any of the above also qualifies. The child cannot provide more than half of his own support, and has to have lived in the house for more than half the year during the tax year If an illness, schooling or military service caused the absence, then the half-year residence requirement is waived. The child must be a United States citizen, United States national or resident alien.
Low-Income Taxpayers
If the amount of income tax owed is less than the amount of the child tax credit, in most cases the credit can't be claimed. However, some taxpayers can claim the difference as a refund of taxes already paid. The amount of the refund is limited to 15 percent of the income over $11,750. If gross income is $12,750, for example, the Child Tax Credit refund is limited to 15 percent of $1,000, or $150.
Income Limits
There is also an upper-income limit that reduces the amount of the Child Tax Credit. The maximum adjusted gross income for a full credit on joint returns is $110,000; for single or head-of-household filers it is $75,000; for married couples filing separately it is $55,000 for each filer.
Working Families Tax Relief
The original law reduced the credit to $700 beginning in tax year 2005. But in 2004, the
Working Families Tax Relief [http://www.taxsolutionsnetwork.com/remove-tax-liens] Act maintained the $1,000 credit through the year 2010 for qualified filers. The IRS does not allow filers of Form 1040EZ to claim the Child Tax Credit. Only forms 1040 and 1040A offer filers the Child Tax Credit.
Giving Credit
The Child Tax Credit is one of several valuable credits that taxpayers can take advantage of by current federal income tax law. The Earned Income Credit allows low-income taxpayers to save some, in some cases all, of their federal tax liability. Other credits allow taxpayers to claim as a credit their child-care, medical and moving expenses.
The Internal Revenue Service offers complete information and instructions on the Child Tax Credit in Publication 972 (see Resources).
Qualifications
To qualify for the credit, each child must be under 17 at the end of the tax year. The child must be the son, daughter, brother, sister, stepchild, stepbrother, stepsister, foster child or adopted child of the tax filer. A child living in the household who is the son or daughter of any of the above also qualifies. The child cannot provide more than half of his own support, and has to have lived in the house for more than half the year during the tax year If an illness, schooling or military service caused the absence, then the half-year residence requirement is waived. The child must be a United States citizen, United States national or resident alien.
Low-Income Taxpayers
If the amount of income tax owed is less than the amount of the child tax credit, in most cases the credit can't be claimed. However, some taxpayers can claim the difference as a refund of taxes already paid. The amount of the refund is limited to 15 percent of the income over $11,750. If gross income is $12,750, for example, the Child Tax Credit refund is limited to 15 percent of $1,000, or $150.
Income Limits
There is also an upper-income limit that reduces the amount of the Child Tax Credit. The maximum adjusted gross income for a full credit on joint returns is $110,000; for single or head-of-household filers it is $75,000; for married couples filing separately it is $55,000 for each filer.
Working Families Tax Relief
The original law reduced the credit to $700 beginning in tax year 2005. But in 2004, the
Working Families Tax Relief [http://www.taxsolutionsnetwork.com/remove-tax-liens] Act maintained the $1,000 credit through the year 2010 for qualified filers. The IRS does not allow filers of Form 1040EZ to claim the Child Tax Credit. Only forms 1040 and 1040A offer filers the Child Tax Credit.
Giving Credit
The Child Tax Credit is one of several valuable credits that taxpayers can take advantage of by current federal income tax law. The Earned Income Credit allows low-income taxpayers to save some, in some cases all, of their federal tax liability. Other credits allow taxpayers to claim as a credit their child-care, medical and moving expenses.
The Internal Revenue Service offers complete information and instructions on the Child Tax Credit in Publication 972 (see Resources).
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