How to Calculate a Child Tax Benefit
The child tax credit is a credit that can be taken on your personal tax returns if you are a taxpayer with qualifying dependents. A qualifying dependent must not have been age 17 at the end of the tax year, must not have provided more than half of his or her own support during the tax year, must have lived with you for more than half of the tax year, be someone you claimed as a dependent on your tax return and be a US resident. Without meeting each of these requirements your dependent cannot be used to claim the child tax credit.
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Instructions
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Obtain a copy of the child tax credit worksheet from the Internal Revenue Service website (see Resources).
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Enter the number of qualifying children you are claiming and multiply that number by 1,000. Enter the total in box one. In box two enter your adjusted gross income for the applicable tax year.
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Enter the amount of any exclusion of income from Puerto Rico, if any, in box two and add the totals from lines two and three and enter the total in box four.
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Enter the amount shown to the left of box five that matches your filing status into box five.
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Determine whether the amount on line five is less than the amount on line four. If the amount on line four is larger than the amount on line five, subtract line five's amount from line four and round the total to the nearest thousand to enter into box six. If the amount on line five is larger, check the box marked "No" and skip line six.
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Multiply the amount in box six by five percent and enter the total into line seven. If the amount in box one of this form is less than the amount in box seven you cannot claim any child tax credit on your income tax return and do not have to fill out the rest of the form. If the amount on line one is larger than line seven, subtract the amount in box seven from the amount in box one and enter the total in box eight.
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Enter your total tax for the tax year on line nine.
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Enter into box 10 the amounts from lines 47, 48, 49 and 50 from your Form 1040 as well as any amount on line 11 of Form 5695, line 22 of Form 8834, line 21 of Form 8910, line 14 of Form 8936 and line 24 of schedule R. Enter any that are applicable to your personal tax return. Add the totals and enter the total amount on line 10.
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Check the "No" box on line 11 if you are not claiming the mortgage interest credit, adoption credit, residential energy efficient property credit or the District of Columbia first-time homebuyer credit. If you are claiming one or more of these you will need to check the "Yes" box and complete the information on a Line 11 Worksheet and enter the total on line 11 of the child tax credit worksheet.
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Subtract the amount on line 11 from the amount you entered onto line nine and enter the total on line 12.
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Enter the amount located on line eight of the worksheet into box 13 if the amount in line eight is less than the amount on line 12. Enter the amount of line 12 into the box on line 13 if it is smaller than the amount on line eight. The amount in box 13 is the amount of child tax credit that you will be able to deduct.
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Tips & Warnings
If the amount on line eight of the worksheet is greater than the amount on line 12, you may be eligible for another child tax credit. See the child tax credit worksheet for details.
References
Resources
- Photo Credit tax forms image by Chad McDermott from Fotolia.com
