Child Tax Credits

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You may be able to claim a child tax credit if you have a qualifying child. For 2004, the maximum amount of the credit is $1,000 for each qualifying child.

A qualifying child is a child who:
  1. Is claimed as your dependent,
  2. Was under age 17 at the end of 2004,
  3. Is (a) your son, daughter, adopted child, stepchild, or a descendant of any of them; or (b) is your brother, sister, stepbrother, stepsister, or a descendant of any of them whom you care for as you would your own child; or (c) is an eligible foster child, and
  4. Is a U.S. citizen or resident.

The credit is limited if your modified adjusted gross income is above a certain amount. The amount at which this phase out begins depends on your filing status, as follows: Married filing joint $110,000 Head of Household/Single/Qualifying Widow or Widower $ 75,000 Married filing separate $ 55,000

In general, the child tax credit is limited also by the sum of your income tax liability and any alternative minimum tax liability. For example, if the amount of the credit is $600, but the amount of your income tax is $500, the credit ordinarily will be limited to $500. However, there are two exceptions to this general rule. First, even if the amount of your child tax credit is greater than the amount of your income taxes, you may be able to claim an "additional" tax child tax credit for as much as 10% of your earned income greater than $10,750. Second, if you have three or more qualifying children, you may be able to claim an additional child tax credit up to the amount of Social Security taxes you paid during the year, less any earned income credit you receive. If you qualify under both these exceptions, you receive the greater of the two additional amounts.

The total amount of the child tax credit and any additional child tax credit cannot exceed the maximum of $1,000 for each qualifying child.

Individuals entitled to receive the child tax credit and additional child tax credit may also be eligible to receive the child and dependent care credit and the earned income credit.

Follow your Form 1040 Instructions or Form 1040A Instructions and complete the child tax credit worksheet. Certain taxpayers may also have to complete worksheets in Publication 972, Child Tax Credit. Use Form 8812 (PDF) to figure the additional child tax credit and attach it to your return. For more information on the child tax credit, refer to Publication 17 ,Your Federal Income Tax.


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