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Child Tax Credit

The child tax credit is for people who have a qualifying child as defined below and is in addition to the credit for child and dependent care expenses.  With the child tax credit, you may be able to reduce the federal income tax you owe by up to $1,000 for each qualifying child under the age of 17.

A qualifying child for the purposes of the child tax credit is a child who:

• Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your grandchild)
• Was under the age of 17 at the end of 2006
• Did not provide over half of his or her own support for 2006
• Lived with you for more than have of 2006
• Was a U.S. citizen, a U.S. national, or a resident of the United States.

The child tax credit is limited if your modified adjusted gross income is above a certain amount.  The amount at which this phase-out begins varies depending on your filing status listed below.

• Single                            = $75,000
• Head of Household       = $75,000
• Qualifying Widow(er)   = $75,000
• Married Filing Separate =$55,000 
• Married Filing Jointly     =$110,000

In addition, the Child Tax Credit is generally limited by the amount of the income tax you owe as well as any alternative minimum tax you owe.

If the amount of your Child Tax Credit is greater than the amount of income tax you owe, you may be able to claim some or all of the difference as an "additional" Child Tax Credit.  The additional Child Tax Credit may give you a refund even if you do not owe any tax.  For 2006, 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.

You may claim the Child Tax Credit on Form 1040 or 1040A.  Details on how to compute the credit can be found in the forms' instructions and in Publication 972, Child Tax Credit.  The Forms and Publications are available from the IRS web site irs.gov or by calling 1-800-TAX-FORM (1-800-829-3676).  For your convenience you may also click on the links provided below.

Form 8812, Additional Child Tax Credit
Publication 972, Child Tax Credit
Form 1040
Form 1040 Instructions
Form 1040A
Form 1040A Instructions
Tax Topic 606, Child Tax Credits