How to Claim a Child Tax Credit

Children are expensive, but they can also be a great tax benefit.

As we all know, children are expensive. Because of this, the federal government provides an income tax credit for each qualifying child, assuming that you meet certain guidelines. The child tax credit allows a credit up to $1,000 per child if you meet the income qualifications. Unlike deductions, which simply reduce the amount of income that is taxed, tax credits directly reduce your tax bill, so they may be quite beneficial.

Instructions

1. In order to get the child tax credit, the child in question must:
   -- be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them (niece, grandchild, great nephew)
   -- be under 17 at the end of tax year
   -- be dependent on you for over half of their support
   -- lived with you over half of the year
   -- be a US citizen, a US national, or a US resident alien.

2. In order to get the full child tax credit, your modified adjusted gross income (AGI) must be not exceed the following limits:

   Married filing jointly -- $110,000.

   Single, head of household, or qualifying widow(er) -- $75,000.

   Married filing separately -- $55,000

   Roughly speaking, your AGI is your gross income less pretax deductions for such things as retirement plan contributions and Social Security taxes. More precisely, it is the income figure at the bottom of the first page of your tax return.

3. To claim the tax credit, you must provide the child's Social Security number. You must file Form 1040, Form 1040A, or Form 1040NR

Tips & Warnings

• You can claim the full amount of your child tax credit even if it exceeds the total amount of taxes you owe. Use Form 8812 -- Additional Child Tax Credit to claim it. You can find a link to the form in the Resources section.

References

• IRS: Publication 972 -- Child Tax Credit

Resources

• IRS: Form 8812 -- Additional Child Tax Credit