The Child Tax Credit provides a welcome tax break for many families.
What makes the credit so nice is that it isn’t a deduction from your taxable income, it is an actual reduction of your taxable income.
Through 2010, the credit is set at $1,000 for each qualifying child, as long as you are within the income tax thresholds. There are some basic guidelines. You usually can’t claim a child tax credit that is more than your income tax liability, but in some cases, the difference is returned to you as a refund. You use form 8812, Additional Child Tax Credit, to calculate your additional credit.
The definition of a qualifying child changed in 2005. Many parents are unaware of this change. For purposes of the Child Tax Credit, a qualifying child must be under the age of 19 on December 31 of the tax year or under the age of 24 and a full-time student for at least five months during the year, or any age and totally and permanently disabled.
The child must be your son, daughter, legally adopted child, grandchild, stepchild, eligible foster child, brother, sister, stepbrother, stepsister or any descendant of the above. The child must also have the same residence as you for more than half of the taxable year, except for absences due to illness, education, business, vacation or military service. More details please visit:-https://researchsnipers.com/ https://auroson.net/ https://entrepreneursnews.org/
If more than one taxpayer is eligible to use the credit, a new tie-breaking rule is used. If one of the qualifying taxpayers is the parent, the credit is given to the parent. If the parents don’t file jointly and both claim the child, the parent that resides with the child for the longest period of time during the year has the right to claim the child. If neither parent claims the child, the parent with the highest adjusted gross income has the right to do so. The old support test which required the taxpayer to have paid more than half the child’s support is no longer used as of 2005.
There is a point when the child tax credit starts to be phased out. The phase-out of the credit begins when your adjusted gross income hits $75,000 for single taxpayers, $55,000 for married filing separately and $110,000 for married filing jointly.
The total credit is reduced by $50 for each $1,000 of income that exceeds the income threshold. The reduction is for the total credit, not for each child. To claim the Child Tax Credit, you must file a 1040 or 1040A.