Fact Sheet: Child Tax Credit
What it is: A credit worth up to $500.00 per child against your taxes. If you have more than one child, you may be able to claim an Additional Child Tax Credit for each additional child. The Additional Child Tax Credit is refundable which means that you may get money back from the IRS even if you don’t owe any tax.
How you get it: File either a Form 1040 or a Form 1040A. Fill out and attach Form 8812 to either the 1040 or the 1040A if you are claiming credit for more than two children. You do not have to attach any schedules to get this credit if your are claiming the credit only for one or two children but you should fill out the worksheet to calculate the credit. The worksheet can be found on page 231 of the instructions to Form 1040.
Rules:
1) The amount of the credit is limited by your income. If you are single, head of household, or a qualifying widow(er), with more than $75,000.00 in income for 2000, or if you are married filing a joint return with a total of more than $110,000.00 in income, or if you are married filing a separate return, the credit will be reduced, and you will have to check Publication 972 to calculate the credit.
2) You must also check Publication 972 if you are claiming the Adoption Credit or the Mortgage Interest Credit.
3) The amount of the Child Tax Credit is reduced if you have claimed the Foreign Tax Credit, Child and Dependent Care Expenses Credit, Education Credits, and Credit for the Elderly or Disabled. You must first deduct these credits from your taxes, and then deduct the Child Tax Credit.
4) Any child you wish to claim for the credit must meet certain requirements:
1. The child must be a U.S. citizen or resident alien. A child adopted from a foreign country will qualify you for this credit even before the adoption is finalized, as long as the child was placed with you by an authorized agency;
2. The child must be under age 17 at the end of 2000;
3. The child must be your son, daughter, adopted child, step-child, grandchild, or foster child. A foster child is any child who you cared for during the entire year, and who is your brother or sister (or step-brother or sister), or a descendent of them, or child placed with you by an authorized agency.
4. The child must be your dependent. If you are divorced or separated, and you don’t have custody of the child you are claiming the credit for, you may claim the credit if the other parent signs a release of dependency exemption to you. This is allowed even if you are married, filing separately.
5. The child must have a valid social security number or individual taxpayer identification number (ITIN).