If you're like me, you like to get ever tax credit that you can. Why not right? It's like buying something that you know you are going to have to buy and having a coupon for it. It would be silly not to use it. The only problem with tax credits is that it's hard to keep track of them all. One such credit is the Child Tax Credit. Here are the rules behind the tax credit of 2011 to see if you qualify.
Who Can Claim the Child Tax Credit?
Families who earn under $130,000 a year and have one or more dependent children under the age of 17 may take advantage of the Child Care Tax Credit on their tax return.
Do You Qualify for this Credit?
There are, of course, several further conditions that must be examined in order to be certain that you qualify for all or some of the Child Tax Credit. They are as follows:
- Only those families that make less than $110,000 annually are eligible for the full credit. Families making between $110,00 and $130,000 receive a reduced credit (specifically $50 per $1,000 made over $110,000).
- Individuals who are unmarried must have earned under $75,000 to qualify for this credit. Taxpayers who are married but filing separate returns must have made no more than $55,000.
- Qualifying children must be citizens or residents of the United States who can be claimed as dependents by the taxpayer. They also must not have reached the age of 17 by the end of the tax year. Children may be your blood children, grandchildren, step children, and / or adopted children. Foster children also fall under this category as long as they have lived in your home for the entire year in question.
How Much Can You Claim?
Taxpayers who make under the $110,000 / year are currently still allowed to claim $1,000 per child as their Child Tax Credit. This is one of the many tax cuts instituted by President George W. Bush early in his first term. In 1998, when the Child Tax Credit came into existence, the per child amount was $400. Over the years, it has been increased to the current $1,000 per child. Beginning in the 2011 tax year, the Child Tax Credit will be reduced to $500.
More from GFC, Below
Can You Receive The Child Tax Credit as Part of Your Refund?
The Child Tax Credit is helpful for those qualifying families. Generally speaking, it functions as a credit against what the taxpayer owes in taxes. Sometimes, however, it can translate into an actual tax refund. For a small percentage of families in the United States, the Child Tax Credit will be larger than their tax liability. In this case, the unused part of the Child Tax Credit can be refundable as an additional Child Tax Credit. The portion that is available for a refund depends on the number of children you have, your total earned income, and, sometimes, the amount of taxes you have paid over the year to Social Security and Medicare. Refer to IRS form 8812 for specific instructions.
As always, it is important to check current tax laws. There is plenty of information available that will help you get the maximum amount of deductions and credits. In today's economy, every dollar counts.