Internal Revenue Code:Sec. 24. Child tax credit
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Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter A - Determination of Tax Liability
PART IV - CREDITS AGAINST TAX
Subpart A - Nonrefundable Personal Credits
Statute
Sec. 24. Child tax credit
(a) Allowance of Credit.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year with
respect to each qualifying child of the taxpayer an amount equal to
$1,000.
(b) Limitations
(1) Limitation based on adjusted gross income
The amount of the credit allowable under subsection (a) shall
be reduced (but not below zero) by $50 for each $1,000 (or
fraction thereof) by which the taxpayer's modified adjusted gross
income exceeds the threshold amount. For purposes of the
preceding sentence, the term ''modified adjusted gross income''
means adjusted gross income increased by any amount excluded from
gross income under section 911, 931, or 933.
(2) Threshold amount
For purposes of paragraph (1), the term ''threshold amount''
means -
(A) $110,000 in the case of a joint return,
(B) $75,000 in the case of an individual who is not married,
and
(C) $55,000 in the case of a married individual filing a
separate return.
For purposes of this paragraph, marital status shall be
determined under section 7703.
(3) Limitation based on amount of tax
In the case of a taxable year to which section 26(a)(2)
does not apply, the credit allowed under subsection (a)
for any taxable year shall not exceed the excess of -
(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
(B) the sum of the credits allowable under this subpart
(other than this section and sections 23 and 25B) and section
27 for the taxable year.
(c) Qualifying child
For purposes of this section -
(1) In general.--The term `qualifying child' means a
qualifying child of the taxpayer (as defined in section 152(c))
who has not attained age 17.
(2) Exception for certain noncitizens
The term ''qualifying child'' shall not include any individual
who would not be a dependent if subparagraph (A) of section 152(b)(3)
were applied without regard to all that follows
''resident of the United States''.
(d) Portion of credit refundable
(1) In general.--The aggregate credits allowed to a
taxpayer under subpart C shall be increased by the lesser of--
(A) the credit which would be allowed under this
section without regard to this subsection and the
limitation under section 26(a)(2) or subsection (b)(3),
as the case may be, or
(B) the amount by which the aggregate amount of
credits allowed by this subpart (determined without
regard to this subsection) would increase if the
limitation imposed by section 26(a)(2) or subsection
(b)(3), as the case may be, were increased by the excess
(if any) of--
(i) 15 percent of so much of the taxpayer's
earned income (within the meaning of section 32)
which is taken into account in computing taxable
income for the taxable year as exceeds $10,000, or
(ii) in the case of a taxpayer with 3 or
more qualifying children, the excess (if any) of--
(I) the taxpayer's social security
taxes for the taxable year, over
(II) the credit allowed under
section for the taxable year.
The amount of the credit allowed under this subsection shall not
be treated as a credit allowed under this subpart and shall
reduce the amount of credit otherwise allowable under subsection
(a) without regard to section 26(a)(2) or subsection (b)(3), as
the case may be. For purposes of subparagraph (B), any amount
excluded from gross income by reason of section 112 shall be
treated as earned income which is taken into account in
computing taxable income for the taxable year.
(2) Social security taxes
For purposes of paragraph (1) -
(A) In general
The term ''social security taxes'' means, with respect to any
taxpayer for any taxable year -
(i) the amount of the taxes imposed by sections 3101 and
3201(a) on amounts received by the taxpayer during the
calendar year in which the taxable year begins,
(ii) 50 percent of the taxes imposed by section 1401 on the
self-employment income of the taxpayer for the taxable year,
and
(iii) 50 percent of the taxes imposed by section 3211(a) on
amounts received by the taxpayer during the calendar year in
which the taxable year begins.
(B) Coordination with special refund of social security taxes
The term ''social security taxes'' shall not include any
taxes to the extent the taxpayer is entitled to a special
refund of such taxes under section 6413(c).
(C) Special rule
Any amounts paid pursuant to an agreement under section
3121(l) (relating to agreements entered into by American
employers with respect to foreign affiliates) which are
equivalent to the taxes referred to in subparagraph (A)(i)
shall be treated as taxes referred to in such subparagraph.
(3) Inflation adjustment
In the case of any taxable year beginning in a calendar year
after 2001, the $10,000 amount contained in paragraph (1)(B)
shall be increased by an amount equal to -
(A) such dollar amount, multiplied by
(B) the cost-of-living adjustment determined under section
1(f)(3) for the calendar year in which the taxable year begins,
determined by substituting ''calendar year 2000'' for
''calendar year 1992'' in subparagraph (B) thereof.
Any increase determined under the preceding sentence shall be
rounded to the nearest multiple of $50.
(e) Identification requirement
No credit shall be allowed under this section to a taxpayer with
respect to any qualifying child unless the taxpayer includes the
name and taxpayer identification number of such qualifying child on
the return of tax for the taxable year.
(f) Taxable year must be full taxable year
Except in the case of a taxable year closed by reason of the
death of the taxpayer, no credit shall be allowable under this
section in the case of a taxable year covering a period of less
than 12 months.
Sources
(Added Pub. L. 105-34, title I, Sec. 101(a), Aug. 5, 1997, 111
Stat. 796; amended Pub. L. 105-206, title VI, Sec. 6003(a), July
22, 1998, 112 Stat. 790; Pub. L. 105-277, div. J, title II, Sec.
2001(b), Oct. 21, 1998, 112 Stat. 2681-901; Pub. L. 106-170, title
V, Sec. 501(b)(1), Dec. 17, 1999, 113 Stat. 1919; Pub. L. 107-16,
title II, Sec. 201(a)-(b)(2)(C), (c)(1), (2), (d), 202(f)(2)(B),
title VI, Sec. 618(b)(2)(A), June 7, 2001, 115 Stat. 45-47, 49,
108; Pub. L. 107-90, title II, Sec. 204(e)(1), Dec. 21, 2001, 115
Stat. 893.)
Amendment of Section
CHILD TAX CREDIT ADJUSTMENT FOR TAX YEARS BEGINNING IN 2002
For inflation adjustment of value in subsection (d)(1)(B)(i) of
this section used in determining potentially refundable amount
for tax years beginning in 2002, see section 3.03 of Revenue
Procedure 2001-59, set out as a note under section 1 of this
title.
AMENDMENT OF SECTION
For termination of amendment by section 901 of Pub. L. 107-16,
see Effective and Termination Dates of 2001 Amendment note below.
Miscellaneous
PRIOR PROVISIONS
A prior section 24, added Pub. L. 92-178, title VII, Sec. 701(a),
Dec. 10, 1971, 85 Stat. 560, Sec. 41; amended Pub. L. 93-625, Sec.
11(a)-(c), (e), 12(a), Jan. 3, 1975, 88 Stat. 2119, 2120; Pub. L.
94-455, title V, Sec. 503(b)(4), title XIX, Sec. 1901(b)(1)(B),
(H)(ii), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1562, 1790, 1791,
1834; Pub. L. 95-600, title I, Sec. 113(c), Nov. 6, 1978, 92 Stat.
2778; Pub. L. 97-473, title II, Sec. 202(b)(1), Jan. 14, 1983, 96
Stat. 2609; Pub. L. 98-21, title I, Sec. 122(c)(1), Apr. 20, 1983,
97 Stat. 87; renumbered Sec. 24 and amended Pub. L. 98-369, div.
A, title IV, Sec. 471(c), 474(f), July 18, 1984, 98 Stat. 826, 831,
related to contributions to candidates for public office, prior to
repeal by Pub. L. 99-514, title I, Sec. 112(a), 151(a), Oct. 22,
1986, 100 Stat. 2108, 2121, applicable to taxable years beginning
after Dec. 31, 1986.
AMENDMENTS
2005 - P.L 109-135
(B)(i) The matter preceding subparagraph (A) of section
24(b)(3) is amended <<NOTE: 26 USC 24.>> by striking ``The
credit'' and inserting ``In the case of a taxable year to which
section 26(a)(2) does not apply, the credit''.
(ii) Paragraph (1) of section 24(d) is amended to read as
follows:
``(1) In general.--The aggregate credits allowed to a
taxpayer under subpart C shall be increased by the lesser of--
``(A) the credit which would be allowed under this
section without regard to this subsection and the
limitation under section 26(a)(2) or subsection (b)(3),
as the case may be, or
``(B) the amount by which the aggregate amount of
credits allowed by this subpart (determined without
regard to this subsection) would increase if the
limitation imposed by section 26(a)(2) or subsection
(b)(3), as the case may be, were increased by the excess
(if any) of--
``(i) 15 percent of so much of the taxpayer's
earned income (within the meaning of section 32)
which is taken into account in computing taxable
income for the taxable year as exceeds $10,000, or
``(ii) in the case of a taxpayer with 3 or
more qualifying children, the excess (if any) of--
``(I) the taxpayer's social security
taxes for the taxable year, over
``(II) the credit allowed under
section for the taxable year.
The amount of the credit allowed under this subsection shall not
be treated as a credit allowed under this subpart and shall
reduce the amount of credit otherwise allowable under subsection
(a) without regard to section 26(a)(2) or subsection (b)(3), as
the case may be. For purposes of subparagraph (B), any amount
excluded from gross income by reason of section 112 shall be
treated as earned income which is taken into account in
computing taxable income for the taxable year.''.
2005 - P.L. 109-73
SEC. 406. SPECIAL RULE FOR DETERMINING EARNED INCOME.
(a) In General.--In the case of a qualified individual, if the
earned income of the taxpayer for the taxable year which includes August
25, 2005, is less than the earned income of the taxpayer for the
preceding taxable year, the credits allowed under sections 24(d) and 32
of the Internal Revenue Code of 1986 may, at the election of the
taxpayer, be determined by substituting--
(1) such earned income for the preceding taxable year, for
(2) such earned income for the taxable year which includes
August 25, 2005.
(b) Qualified Individual.--For purposes of this section, the term
``qualified individual'' means any individual whose principal place of
abode on August 25, 2005, was located--
(1) in the core disaster area, or
(2) in the Hurricane Katrina disaster area (but outside the
core disaster area) and such individual was displaced from such
principal place of abode by reason of Hurricane Katrina.
(c) Earned Income.--For purposes of this section, the term ``earned
income'' has the meaning given such term under section 32(c) of such
Code.
(d) Special Rules.--
(1) Application to joint returns.--For purposes of
subsection (a), in the case of a joint return for a taxable year
which includes August 25, 2005--
(A) such subsection shall apply if either spouse is
a qualified individual, and
(B) the earned income of the taxpayer for the
preceding taxable year shall be the sum of the earned
income of each spouse for such preceding taxable year.
(2) Uniform application of election.--Any election made
under subsection (a) shall apply with respect to both section
24(d) and section 32 of such Code.
(3) Errors treated as mathematical error.--For purposes of
section 6213 of such Code, an incorrect use on a return of
earned income pursuant to subsection (a) shall be treated as a
mathematical or clerical error.
(4) No effect on <<NOTE: Applicability.>> determination of
gross income, etc.--Except as otherwise provided in this
section, the Internal Revenue Code of 1986 shall be applied
without regard to any substitution under subsection (a).
2004 - Pub. L. 108-311 Sec. 204. Subsec. (c)(1)and(2)
are amended for definition of a qualifying child.
2004 - Pub. L. 108-311 Sec. 102. Subsec. (d)(1)(B)(i)
is amended by striking ``(10 percent in the case of taxable
years beginning before January 1, 2005)''.
Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2003.
2004 - Pub.L. 108-31, Sec. 101(a), amends Subsection (a).
Effective Date.--The amendments made by to section shall apply
to taxable years beginning after December 31, 2003.
2002 - Subsec. (d)(1)(B). Pub. L. 107-147, Sec.411(b), is amended
by striking "amount of credit allowed by this section" and inserting
"aggregate amount of credits allowed by this subpart ".
2002 - Subsec. 601(b)(2), Pub. L. 107-147. The amendments
made by sections 201(b), 202(f), and 618(b) of the Economic
Growth and Tax Relief Reconciliation Act of 2001 shall not
apply to taxable years beginning during 2002 and 2003.
2001 - Subsec. (a). Pub. L. 107-16, Sec. 201(a), 901, temporarily
amended heading and text of subsec. (a) generally. Prior to
amendment, text read as follows: ''There shall be allowed as a
credit against the tax imposed by this chapter for the taxable year
with respect to each qualifying child of the taxpayer an amount
equal to $500 ($400 in the case of taxable years beginning in
1998).'' See Effective and Termination Dates of 2001 Amendment note
below.
Subsec. (b). Pub. L. 107-16, Sec. 201(b)(2)(A), 901, temporarily
amended heading generally, substituting ''Limitations'' for
''Limitation based on adjusted gross income''. See Effective and
Termination Dates of 2001 Amendment note below.
Subsec. (b)(1). Pub. L. 107-16, Sec. 201(b)(2)(B), 901,
temporarily amended heading generally, substituting ''Limitation
based on adjusted gross income'' for ''In general''. See Effective
and Termination Dates of 2001 Amendment note below.
Subsec. (b)(3). Pub. L. 107-16, Sec. 201(b)(1), 901, temporarily
added par. (3). See Effective and Termination Dates of 2001
Amendment note below.
Subsec. (b)(3)(B). Pub. L. 107-16, Sec. 618(b)(2)(A), 901,
temporarily substituted ''sections 23 and 25B'' for ''section 23''.
See Effective and Termination Dates of 2001 Amendment note below.
Pub. L. 107-16, Sec. 202(f)(2)(B), 901, temporarily substituted
''this section and section 23'' for ''this section''. See
Effective and Termination Dates of 2001 Amendment note below.
Subsec. (d). Pub. L. 107-16, Sec. 201(c)(1), 901, temporarily
amended subsec. heading and heading and text of par. (1)
generally. Prior to amendment, text read as follows: ''In the case
of a taxpayer with three or more qualifying children for any
taxable year, the aggregate credits allowed under subpart C shall
be increased by the lesser of -
''(A) the credit which would be allowed under this section
without regard to this subsection and the limitation under
section 26(a); or
''(B) the amount by which the aggregate amount of credits
allowed by this subpart (without regard to this subsection) would
increase if the limitation imposed by section 26(a) were
increased by the excess (if any) of -
''(i) the taxpayer's Social Security taxes for the taxable
year, over
''(ii) the credit allowed under section 32 (determined
without regard to subsection (n)) for the taxable year.
The amount of the credit allowed under this subsection shall not be
treated as a credit allowed under this subpart and shall reduce the
amount of credit otherwise allowable under subsection (a) without
regard to section 26(a).''
See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (d)(1). Pub. L. 107-16, Sec. 201(b)(2)(C)(i), 901,
temporarily substituted ''subsection (b)(3)'' for ''section 26(a)''
wherever appearing in subsec. (d), as amended by Pub. L. 107-16,
Sec. 201(c). See Effective and Termination Dates of 2001 Amendment
note below.
Subsec. (d)(1)(B). Pub. L. 107-16, Sec. 201(b)(2)(C)(ii), 901,
which directed the temporary substitution of ''amount of credit
allowed by this section'' for ''aggregate amount of credits allowed
by this subpart'', in subpar. (B) as amended by Pub. L. 107-16,
Sec. 201(c), could not be executed because ''aggregate amount of
credits allowed by this subpart'' did not appear subsequent to
amendment by Pub. L. 107-16, Sec. 201(c). See Effective and
Termination Dates of 2001 Amendment note below.
Subsec. (d)(2). Pub. L. 107-16, Sec. 201(d), 901, temporarily
redesignated par. (3) as (2) and struck out heading and text of
former par. (2). Text read as follows: ''For taxable years
beginning after December 31, 2001, the credit determined under this
subsection for the taxable year shall be reduced by the excess (if
any) of -
''(A) the amount of tax imposed by section 55 (relating to
alternative minimum tax) with respect to such taxpayer for such
taxable year, over
''(B) the amount of the reduction under section 32(h) with
respect to such taxpayer for such taxable year.''
See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (d)(2)(A)(iii). Pub. L. 107-90, which directed the
amendment of par. (3)(A)(iii) by substituting ''section 3211(a)''
for ''section 3211(a)(1)'', was executed to par. (2)(A)(iii), to
reflect the probable intent of Congress and the redesignation of
par. (3) as (2) by Pub. L. 107-16, Sec. 201(d)(2). See above.
Subsec. (d)(3). Pub. L. 107-16, Sec. 201(d)(2), 901, temporarily
redesignated par. (4) as (3). Former par. (3) temporarily
redesignated (2). See Effective and Termination Dates of 2001
Amendment note below.
Subsec. (d)(4). Pub. L. 107-16, Sec. 201(c)(2), 901, temporarily
added par. (4). Former par. (4) temporarily redesignated (3). See
Effective and Termination Dates of 2001 Amendment note below.
1999 - Subsec. (d)(2). Pub. L. 106-170 substituted ''2001'' for
''1998'' in introductory provisions.
1998 - Subsec. (d)(1). Pub. L. 105-206, Sec. 6003(a)(1)(C), added
par. (1) and struck out heading and text of former par. (1). Text
read as follows: ''In the case of a taxpayer with 3 or more
qualifying children for any taxable year, the amount of the credit
allowed under this section shall be equal to the greater of -
''(A) the amount of the credit allowed under this section
(without regard to this subsection and after application of the
limitation under section 26), or
''(B) the alternative credit amount determined under paragraph
(2).''
Subsec. (d)(2). Pub. L. 105-277 substituted ''For taxable years
beginning after December 31, 1998, the credit'' for ''The credit''.
Pub. L. 105-206, Sec. 6003(a)(1)(C), added par. (2) and struck
out heading and text of former par. (2). Text read as follows:
''For purposes of this subsection, the alternative credit amount is
the amount of the credit which would be allowed under this section
if the limitation under paragraph (3) were applied in lieu of the
limitation under section 26.''
Subsec. (d)(3). Pub. L. 105-206, Sec. 6003(a)(1)(A), (B), (2),
redesignated par. (5) as (3), substituted ''paragraph (1)'' for
''paragraph (3)'' in introductory provisions, and struck out
heading and text of former par. (3). Text read as follows: ''The
limitation under this paragraph for any taxable year is the
limitation under section 26 (without regard to this subsection) -
''(A) increased by the taxpayer's social security taxes for
such taxable year, and
''(B) reduced by the sum of -
''(i) the credits allowed under this part other than under
subpart C or this section, and
''(ii) the credit allowed under section 32 without regard to
subsection (m) thereof.''
Subsec. (d)(4). Pub. L. 105-206, Sec. 6003(a)(1)(A), struck out
heading and text of par. (4). Text read as follows: ''If the amount
of the credit under paragraph (1)(B) exceeds the amount of the
credit under paragraph (1)(A), such excess shall be treated as a
credit to which subpart C applies. The rule of section 32(h) shall
apply to such excess.''
Subsec. (d)(5). Pub. L. 105-206, Sec. 6003(a)(1)(B), redesignated
par. (5) as (3).
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENTS
Pub. L. 107-90, title II, Sec. 204(f), Dec. 21, 2001, 115 Stat.
893, provided that: ''The amendments made by this section (enacting
subchapter E of chapter 22 of this title and amending this section
and sections 72, 3201, 3211, 3221, and 3231 of this title) shall
apply to calendar years beginning after December 31, 2001.''
Pub. L. 107-16, title II, Sec. 201(e), June 7, 2001, 115 Stat.
47, provided that:
''(1) In general. - Except as provided in paragraph (2), the
amendments made by this section (amending this section and sections
23, 25, 26, 32, 904, and 1400C of this title) shall apply to
taxable years beginning after December 31, 2000.
''(2) Subsection (b). - The amendments made by subsection (b)
(amending this section and sections 23, 25, 26, 904, and 1400C of
this title) shall apply to taxable years beginning after December
31, 2001.''
Amendment by section 202(f)(2)(B) of Pub. L. 107-16 applicable to
taxable years beginning after Dec. 31, 2001, see section 202(g)(1)
of Pub. L. 107-16, set out as a note under section 23 of this
title.
Pub. L. 107-16, title VI, Sec. 618(d), June 7, 2001, 115 Stat.
108, provided that: ''The amendments made by this section (enacting
section 25B of this title and amending this section and sections
25, 25B, 26, 904, and 1400C of this title) shall apply to taxable
years beginning after December 31, 2001.''
Amendment by Pub. L. 107-16 inapplicable to taxable, plan, or
limitation years beginning after Dec. 31, 2010, and the Internal
Revenue Code of 1986 to be applied and administered to such years
as if such amendment had never been enacted, see section 901 of
Pub. L. 107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1999 AMENDMENT
Pub. L. 106-170, title V, Sec. 501(c), Dec. 17, 1999, 113 Stat.
1919, provided that: ''The amendments made by this section
(amending this section and sections 26 and 904 of this title) shall
apply to taxable years beginning after December 31, 1998.''
EFFECTIVE DATE OF 1998 AMENDMENTS
Pub. L. 105-277, div. J, title II, Sec. 2001(c), Oct. 21, 1998,
112 Stat. 2681-901, provided that: ''The amendments made by this
section (amending this section and section 26 of this title) shall
apply to taxable years beginning after December 31, 1997.''
Amendment by Pub. L. 105-206 effective, except as otherwise
provided, as if included in the provisions of the Taxpayer Relief
Act of 1997, Pub. L. 105-34, to which such amendment relates, see
section 6024 of Pub. L. 105-206, set out as a note under section 1
of this title.
EFFECTIVE DATE
Section 101(e) of Pub. L. 105-34 provided that: ''The amendments
made by this section (enacting this section and amending sections
32, 501, and 6213 of this title and section 1324 of Title 31, Money
and Finance) shall apply to taxable years beginning after December
31, 1997.''
REFUNDS DISREGARDED IN ADMINISTRATION OF FEDERAL AND FEDERALLY
ASSISTED PROGRAMS
Pub. L. 107-16, title II, Sec. 203, June 7, 2001, 115 Stat. 49,
provided that: ''Any payment considered to have been made to any
individual by reason of section 24 of the Internal Revenue Code of
1986, as amended by section 201, shall not be taken into account as
income and shall not be taken into account as resources for the
month of receipt and the following month, for purposes of
determining the eligibility of such individual or any other
individual for benefits or assistance, or the amount or extent of
benefits or assistance, under any Federal program or under any
State or local program financed in whole or in part with Federal
funds.''
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 25, 26, 32, 151, 501,
904, 1400C, 6211, 6213 of this title.
