Child Tax Credit

Question 1

If a taxpayer cannot benefit from the nonrefundable credit, will the taxpayer may be able to qualify for the refundable additional child tax credit?

What schedule is it on?

Answer 1

Yes, if a taxpayer cannot benefit from the nonrefundable credit, the taxpayer may be able to qualify for the refundable additional tax credit.

Form 8812

Question 2

What form is the child tax credit and the additional tax credit entered on?

Answer 2

Form 1040

Question 3

What is the Child Tax Credit?

Answer 3

The child tax credit is a NONREFUNDABLE credit that allows taxpayers to claim a tax credit up to $2,000 per qualifying child, which reduces their tax liability.

Question 4

What is the additional child tax credit?

Answer 4

Taxpayers who are not able to claim the full amount of the child tax credit may be able to take the refundable additional child tax credit.

Question 5

Who can claim the child tax credit?

Answer 5

To be eligible to claim the child tax credit, the taxpayer must have at least ONE qualifying child.

If taxpayers claim the child tax credit or the additional child tax credit but are not eligible for the credit, they can be banned from the claiming the credit for either two or ten years.

Question 6

Does the child have to be the taxpayer’s dependent?

Answer 6

Yes, the child must be the taxpayers dependent.

Question 7

Who is the custodial parent?

Answer 7

The custodial parent is the parent with whom the child lived for the greater number of nights during the year.

Question 8

When can the noncustodial parent claim the child tax and additional child credit?

Answer 8

The noncustodial parent may be entitled to claim the child tax credit and additional child tax credit for the qualifying child if the custodial parent provides them with Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent.

Question 9

How do I determine eligibility for the child tax credit?

Answer 9

To determine whether a child meets the criteria of a qualifying child for the child tax credit or additional tax credit, the child must be

• under the age 17 on December 31st of the tax year
• Lived with the taxpayer for more than 6 months of the year (special rules for divorced or separated parents)
• Did not provide over half of his or her own support
• Meets the relationship test
• Is a US citizen, US national, or resident of the United States
• Has a valid Social Security Number

Question 10

What is the amount of the Child Tax Credit?

What is the amount claimed on Form 1040 based on?

Answer 10

The maximum amount taxpayers can claim for the child tax credit is $2,000 for each qualifying child.

The amount claimed on Form 1040 is based on the taxpayer’s filing status, modified adjusted gross income and tax liability.

Question 11

What can reduce the amount of the Child Tax Credit?

Answer 11

The amount of the credit may be reduced if the taxpayer’s:

• Modified Adjusted Gross Income is above the limit for the taxpayer’s filing status
• Tax liability less the majority of the nonrefundable credits is less than the maximum child tax credit.

Question 12

What is MAGI?

Answer 12

The taxpayers’ Modified Adjusted Gross Income is the same as their AGI from Form 1040.

Question 13

What is the Additional Child Tax Credit?

Answer 13

This credit is for certain individuals who get less than the full amount of the Child Tax Credit. This credit may give taxpayers a refund even if they do not owe tax.

Question 14

What is the amount of the Additional Child Tax Credit?

Answer 14

This credit is for certain individuals who get less than the full amount of the child tax credit.

This may be given to taxpayers even if a refund even if they do not owe any tax.

Question 15

What is the amount of the Additional Child Tax Credit?

What is the stipulation for taxpayers with earned income over $2,500?

Answer 15

The additional child tax credit allows eligible taxpayers claim up to $1400 for each qualifying child.

The refundable portion is indexed for inflation.

For taxpayers with earned income over $2,500 the credit is based on the lesser of:

• 15% of the taxpayers taxable earned income that is over $2,500 or
• the amount of unused child tax credit (caused when tax liability is less than allowed credit).

Question 16

What is another method to compute the additional child tax credit for taxpayers with three or more qualifying children?

Answer 16

• Had Social Security or Medicare taxes withheld from their pay
• Were self- employed and paid self - employment tax
• Paid tax on tips not reported to their employer
• Did i not receive the maximum available child tax credit

Question 17

How Do I calculate the additional child tax credit?

Answer 17

Schedule 8812 is used to calculate the credit, which is entered on the additional child tax credit line on Form 1040.

Question 18

What is another credit for dependents other than the child tax credit and additional child tax credit?

What must the dependent be to qualify?

Who may not qualify for this non refundable credit?

Answer 18

There is a $500 credit for other dependents who do not qualify for the $2,000 child tax credit.

THe dependent must be a US citizen, US national, or resident of the US. The dependent must have ATIN, ITIN or SSN.

The $500 non refundable credit cover dependents who don’t qualify for the child tax credit, such as children who are age 17 and above or dependents who meet the relationship test (elderly parents)

You cant clain it for yourself ( or spouse MFJ)