In most cases, payments will range from $300 to $600 for individuals and $600 to $1200 for joint filers. Taxpayers may receive $300 for each qualifying child. Payments could be less, depending on tax liability and Adjusted Gross Income. Phaseout reduction begins at $75,000 for single filers and $150,000 for joint filers.
Examples of how the Economic Stimulus Act of 2008 may affect taxpayers who are married, file a joint return and have children who qualify for the child tax credit payment:
1) Married couple with two children, wages of $4,000, no federal income tax liability before child tax credit.
Rebate is $600
Qualifying child credit is $600
TOTAL is $1,200
2) Married couple with two children, no wages, veterans’ payments of $2,000, social security benefits of $2,000, no federal income tax liability before child tax credit.
Rebate is $600
Qualifying child credit is $600
TOTAL is $1,200
3) Married couple with two children, no wages, no social security benefits, veterans’ payments of $4,000, no federal income tax liability before child tax credit.
Rebate is $600
Qualifying child credit is $600
TOTAL is $1,200
4) Married couple with two children, no wages, no social security benefits, no veterans’ payments, AGI is $25,000, federal income tax liability before child tax credit is $70.
Rebate is $600
Qualifying child credit is $600
TOTAL is $1,200
5) Married couple with two children, AGI is $35,000, federal income tax liability before child tax credit is $1,070.
Rebate is $1,070
Qualifying child credit is $600
TOTAL is $1,670
6) Married couple with two children, AGI is $80,000, federal income tax liability before child tax credit exceeds $1,200.
Rebate is $1,200
Qualifying child credit is $600
TOTAL is $1,800
7) Married couple with two children, AGI is $160,000, federal income tax liability before child tax credit exceeds $1,200.
Rebate is $1,200
Qualifying child credit is $600
Phaseout reduction is ($500)
TOTAL is $1,300
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