The Child Tax Credit, allowed by §24, is a credit that may reduce the tax liability of a qualifying individual. However, unlike the Earned Income Tax Credit, the Child Tax Credit does not produce a refund if the credit should exceed the amount of taxes due. A taxpayer with a qualifying child may take a credit of up to $1,000.00 for each qualifying child. Also, if the amount of the credit is greater than the amount of tax owed, an "Additional Child Tax Credit" may be claimed.
To qualify for the child tax credit:
For years after 2004, there is a uniform definition of a "qualifying child". MAGI amounts change each year, so consult Publication 17 for the applicable year for further guidance.
The taxpayer's qualifying child must be:
- Son or daughter
- Stepson or Stepdaughter
- Adopted child - includes a child placed with taxpayer for adoption by an authorized placement agency, even if the adoption is not final. An authorized placement agency includes any person authorized by state law to place children for legal adoption.
- Grandchild - any descendant of taxpayer’s son, daughter, or adopted child. A grandchild includes taxpayer’s great-grandchild, great-great-grandchild, etc.
- Eligible foster child:
- Child must have lived with the taxpayer as a member of the taxpayer’s household for the whole year,
- Taxpayer must have cared for that child as her own, and
- Child is taxpayer’s brother, sister, stepbrother, or stepsister; a descendant (including a child or adopted child) of taxpayer’s brother, sister, stepbrother, or stepsister; or a child” placed with taxpayer by an authorized placement agency. This requirement was not included until 2000.
Brother or sister Step-brother or step-sister descentdant of any of above individuals, which includes grandchild, niece or nephew
5. Not have provided more than half of this/her own support.
6. Single or not joining in a joint return.
7. A member of taxpayer's household for more than half of the year.
Internal Revenue Code
|IRC §24||Child Tax Credit|
IRS Publications and Forms
|IRS Publication 972||Child Tax Credit|