The child tax credit is a
credit that you may be able to
take on your tax return. It may
reduce your tax by as much as
$1,000 for each of your
qualifying children.
The additional child tax
credit is a credit you may be
able to take if you are not able
to claim the full amount of the
child tax credit.
This chapter explains:
Who is a qualifying
child.
How much is the
credit.
How to claim the
credit.
Why you should check
your tax withholding.
The child tax credit and
the additional child tax credit
should not be confused with the
child and dependent care credit
discussed in chapter 34.
If you have
no tax. Credits, such
as the child tax credit, the
adoption credit, or the
credit for child and
dependent care expenses, are
used to reduce tax. If your
tax on Form 1040, line 45,
or Form 1040A, line 28, is
zero, do not figure the
child tax credit because
there is no tax to reduce.
However, you may qualify for
the additional child tax
credit on line 67 (Form
1040) or line 42 (Form
1040A).
Useful Items - You
may want to see:
Publication
972
Child Tax Credit
Form
(and Instructions)
8812
Additional Child Tax
Credit
W-4
Employee's Withholding
Allowance Certificate
Qualifying Child
A qualifying child for
purposes of the child tax credit
must be all of the following.
Claimed as your
dependent on line 6c of
Form 1040 or Form 1040A.
Under age 17 at the
end of 2004.
Your:
Son,
daughter,
adopted child,
stepchild, or a
descendant of
any of them (for
example, your
grandchild),
Brother,
sister,
stepbrother,
stepsister, or a
descendant of
any of them (for
example, your
niece or nephew)
whom you cared
for as you would
your own child,
or
Foster child
(any child
placed with you
by an authorized
placement agency
whom you cared
for as you would
your own child).
A U.S. citizen or
resident alien.
Example.
Your son turned 17 on
December 30, 2004. He is a
citizen of the United States
and you claimed him as a
dependent on your return. He
is not a qualifying child
for the child tax credit
because he was not under age
17 at the end of 2004.
Adopted
child.
An adopted child is always
treated as your own child.
An adopted child includes a
child placed with you by an
authorized placement agency
for legal adoption even if
the adoption is not final.
Kidnapped
child.
A kidnapped child is
treated as a qualifying
child for the child tax
credit if both of the
following statements are
true.
The child is
presumed by law
enforcement
authorities to have
been kidnapped by
someone who is not a
member of your
family or the
child's family.
The child
qualified as your
dependent for the
part of the year
before the
kidnapping.
This treatment applies for
all years until the child is
returned. However, the last
year this treatment can
apply is the earlier of:
The year there
is a determination
that the child is
dead, or
The year the
child would have
reached age 16.
Amount of Credit
The maximum amount you can
claim for the credit is $1,000
for each qualifying child.
Limits on
the Credit
You must reduce your
child tax credit if either
(1) or (2) applies.
The amount on
Form 1040, line 45
or Form 1040A, line
28 is less than the
credit. If this
amount is zero, you
cannot take this
credit because there
is no tax to reduce.
But you may be able
to take the
additional child tax
credit. See
Additional Child
Tax Credit,
later.
Your modified
adjusted gross
income (AGI) is
above the amount
shown below for your
filing status.
Married
filing
jointly -
$110,000.
Single,
head of
household,
or
qualifying
widow(er) -
$75,000.
Married
filing
separately -
$55,000.
Modified AGI.
For purposes of the
child tax credit, your
modified AGI is your AGI
plus the following
amounts that may apply
to you.
Any amount
excluded from
income because
of the exclusion
of income from
Puerto Rico.
Any amount
on line 43 or
line 48 of Form
2555, Foreign
Earned Income.
Any amount
on line 18 of
Form 2555-EZ,
Foreign Earned
Income
Exclusion.
Any amount
on line 15 of
Form 4563,
Exclusion of
Income for Bona
Fide Residents
of American
Samoa.
If you do not have any
of the above, your
modified AGI is the same
as your AGI.
AGI. Your AGI
is the amount on Form
1040, line 37, or Form
1040A, line 22.
Claiming the Credit
To claim the child tax
credit, you must file Form 1040
or Form 1040A. You cannot claim
the child tax credit on Form
1040EZ. You must provide the
name and identification number
(usually a social security
number) on your tax return for
each qualifying child.
Answer the
Questions in your
form instructions for Form 1040,
line 51 or Form 1040A, line 33
to find out which child tax
credit worksheet you can use to
figure the credit.
If you answer “Yes”
to question 1, 2, or 3 in your
Form 1040 instructions or
question 1 or 2 in your Form
1040A instructions, you must
complete the child tax credit
worksheet in Publication 972.
Otherwise, you can use the
Child
Tax Credit Worksheet
in your Form 1040 or Form 1040A
instructions. (See the filled-in
example, later.)
Example
Amy Brown files as head
of household and has two
dependent children under age
17. The children are
qualifying children for
purposes of the child tax
credit. Amy's only income is
her salary of $23,500. Amy
chooses to itemize her
deductions and files Form
1040. Her AGI, shown on line
37 of her Form 1040, is
$23,500. This is her taxable
earned income.
Amy does not file Form
2555, 2555-EZ, or 4563. She
does not exclude income from
Puerto Rico. Her modified
AGI is $23,500.
Amy's tax, shown on line
45 of her Form 1040, is
$708. She claims a $437
credit for child and
dependent care expenses on
line 47. She claims a $2,302
earned income credit on line
65a. She has no other
credits.
After answering the
Questions in the
Form 1040 instructions for
line 51, she completes the
child tax credit worksheet
to figure her child tax
credit of $271. Amy's
completed questions and
child tax credit worksheet
are shown later.
Amy reads the
TIP in the
worksheet and finds that she
may be able to take the
additional child tax credit.
See Additional Child Tax
Credit and Amy's
completed Form 8812, later.
This credit is for certain
individuals who get less than
the full amount of the child tax
credit. The additional child tax
credit may give you a refund
even if you do not owe any tax.
How to
claim the additional child
tax credit. To claim
the additional child tax
credit, follow the steps
below.
Make sure you
figured the amount,
if any, of your
child tax credit.
See
Claiming the
Credit,
earlier.
If you answered
“Yes”
on line 4 or line 5
of the
Child Tax Credit
Worksheet
in the Form 1040 or
Form 1040A
instructions, or
line 13 of the
Child Tax Credit
Worksheet
in Publication 972,
use Form 8812 to see
whether you can take
the additional child
tax credit.
If you have an
additional child tax
credit on line 13 of
Form 8812, carry it
to Form 1040, line
67 or Form 1040A,
line 42.
Checking Your
Withholding
The child tax credit
decreases your tax. You can
check your tax withholding by
using Publication 919, How Do I
Adjust My Tax Withholding.
If you are having too much
tax withheld, and you prefer to
have the money during the year,
you may be able to decrease your
withholding. You do this by
completing a new Form W-4 and
giving it to your employer.
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