Child Tax Credit Made Easy

If you are a taxpayer with dependent children under the age of 18, you are most likely entitled to a Child Tax Credit. The Child Tax Credit can provide a tax reduction or refund of up to $1000 per child on your federal taxes. You will note that the Child Tax Credit works to directly reduce your overall tax bill, as opposed to a tax deduction which only reduces the amount of income considered in determining your overall tax. With these kind of benefits, it makes sense for you to do your homework and make sure that you are taking full advantage of the Child Tax Credit.

Before you claim the Child Tax Credit, you will need to ensure that your child is eligible. If your biological child is a US citizen who lived with you for more than six months during the year and was under the age of 17 at the end of the year, then your child is most likely eligible for the Child Tax Credit (use the worksheet on page 19 of the Form 1040 instructions to ensure that your child is indeed eligible). Once you have verified that your child is eligible for the Child Tax Credit, check the box on Form 1040, line 6c, to show that your child does indeed meet the Child Tax Credit requirements.

Once you have verified that your child is eligible for the Child Tax Credit, you will need to determine whether you can use the Child Tax Credit Worksheet to determine the amount of the Child Tax Credit (found on page 43 of the Form 1040 instructions) or if you will need to use Pub. 972 to determine the amount of your Child Tax Credit. You can make this determination by answering the questions found on page 42 of the Form 1040 instructions. In general, if you are married, filing jointly, and make more than $110,000 or are claiming additional credits such as an Adoption Credit or Residential Energy Efficient Property Credit, then you will need to use Pub. 972 to determine the amount of your Child Tax Credit, which may be reduced based upon your income level or the amount of the other credits that you have taken. After you have used either the Child Tax Credit Worksheet or Pub. 972 to determine your Child Tax Credit, you will then enter the amount of the credit on your tax form (Line 53 for Form 1040 filers).