34.   Child Tax Credit

Introduction

The child tax credit is a credit that may reduce your tax by as much as $1,000 for each of your qualifying children.

The additional child tax credit is a credit you may be able to take if you are not able to claim the full amount of the child tax credit.

This chapter explains the following.

  • Who is a qualifying child.

  • The amount of the credit.

  • How to claim the credit.

The child tax credit and the additional child tax credit should not be confused with the child and dependent care credit discussed in chapter 32.

If you have no tax.   Credits, such as the child tax credit or the credit for child and dependent care expenses, are used to reduce tax. If your tax on Form 1040, line 46, or Form 1040A, line 28, is zero, do not figure the child tax credit because there is no tax to reduce. However, you may qualify for the additional child tax credit on line 65 (Form 1040) or line 39 (Form 1040A).

Useful Items - You may want to see:

Publication

  • 972 Child Tax Credit

Form (and Instructions)

  • Schedule 8812 (Form 1040A or 1040) Child Tax Credit

  • W-4 Employee's Withholding Allowance Certificate

Qualifying Child

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

  1. Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your grandchild, niece, or nephew),

  2. Was under age 17 at the end of 2013,

  3. Did not provide over half of his or her own support for 2013,

  4. Lived with you for more than half of 2013 (see Exceptions to time lived with you , later),

  5. Is claimed as a dependent on your return,

  6. Does not file a joint return for the year (or files it only as a claim for refund), and

  7. Was a U.S. citizen, a U.S. national, or a resident of the United States. If the child was adopted, see Adopted child , later.

For each qualifying child you must check the box on Form 1040 or Form 1040A, line 6c.

Example 1.

Your son turned 17 on December 30, 2013. He is a citizen of the United States and you claimed him as a dependent on your return. He is not a qualifying child for the child tax credit because he was not under age 17 at the end of 2013.

Example 2.

Your daughter turned 8 years old in 2013. She is not a citizen of the United States, has an ITIN, and lived in Mexico all of 2013. She is not a qualifying child for the child tax credit because she was not a resident of the United States for 2013.

Filers who have certain child dependents with an Individual Taxpayer Identification Number (ITIN).   If you are claiming a child tax credit or additional child tax credit for a child you identified on your tax return with an ITIN instead of an SSN, you must complete Part I of Schedule 8812 (Form 1040A or 1040).

  Although a child may be your dependent, you may only claim a child tax credit or additional child tax credit for a dependent who is a citizen, national, or resident of the United States. To be treated as a resident of the United States, a child generally will need to meet the requirements of the substantial presence test. For more information about the substantial presence test, see Publication 519, U.S. Tax Guide for Aliens.

Adopted child.   An adopted child is always treated as your own child. An adopted child includes a child lawfully placed with you for legal adoption.

  If you are a U.S. citizen or U.S. national and your adopted child lived with you all year as a member of your household in 2013, that child meets condition (7) above to be a qualifying child for the child tax credit.

Exceptions to time lived with you.   A child is considered to have lived with you for more than half of 2013 if the child was born or died in 2013 and your home was this child's home for more than half the time he or she was alive. Temporary absences by you or the child for special circumstances, such as for school, vacation, business, medical care, military service, or detention in a juvenile facility, count as time the child lived with you.

  There are also exceptions for kidnapped children and children of divorced or separated parents. For details, see Residency Test in chapter 3.

Qualifying child of more than one person.   A special rule applies if your qualifying child is the qualifying child of more than one person. For details, see Special Rule for Qualifying Child of More Than One Person in chapter 3.

Amount of Credit

The maximum amount you can claim for the credit is $1,000 for each qualifying child.

Limits on the Credit

You must reduce your child tax credit if either (1) or (2) applies.

  1. The amount on Form 1040, line 46, or Form 1040A, line 28, is less than the credit. If this amount is zero, you cannot take this credit because there is no tax to reduce. But you may be able to take the additional child tax credit. See Additional Child Tax Credit , later.

  2. Your modified adjusted gross income (AGI) is more than the amount shown below for your filing status.

    1. Married filing jointly - $110,000.

    2. Single, head of household, or qualifying widow(er) - $75,000.

    3. Married filing separately - $55,000.

Modified AGI.   For purposes of the child tax credit, your modified AGI is your AGI plus the following amounts that may apply to you.
  • Any amount excluded from income because of the exclusion of income from  
    Puerto Rico. On the dotted line next to Form 1040, line 38, enter the amount excluded and identify it as “EPRI.” Also attach a copy of any Form(s) 499R-2/W-2PR to your return.

  • Any amount on line 45 or line 50 of Form 2555, Foreign Earned Income.

  • Any amount on line 18 of Form 2555-EZ, Foreign Earned Income Exclusion.

  • Any amount on line 15 of Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa.

  If you do not have any of the above, your modified AGI is the same as your AGI.

AGI.   Your AGI is the amount on Form 1040, line 38, or Form 1040A, line 22.

Claiming the Credit

To claim the child tax credit, you must file Form 1040 or Form 1040A. You cannot claim the child tax credit on Form 1040EZ. You must provide the name and identification number (usually a social security number) on your tax return for each qualifying child.

If you claim the child tax credit with a child identified by an ITIN, you must also file Schedule 8812.

To figure your credit, first review the Child Tax Credit Worksheet in your Form 1040 or 1040A instructions. If you are instructed to use Publication 972, you may not use the worksheet in your tax return instructions; instead, you must use Publication 972 to figure the credit. If you are not instructed to use Publication 972, you may use the Child Tax Credit Worksheet in your Form 1040 or 1040A instructions or Publication 972 to figure the credit.

Additional Child Tax Credit

This credit is for certain individuals who get less than the full amount of the child tax credit. The additional child tax credit may give you a refund even if you do not owe any tax.

How to claim the additional child tax credit.   To claim the additional child tax credit, follow the steps below.
  1. Make sure you figured the amount, if any, of your child tax credit. See Claiming the Credit , earlier.

  2. If you answered “Yes” on line 9 or line 10 of the Child Tax Credit Worksheet in the Form 1040 or Form 1040A instructions, or line 13 of the Child Tax Credit Worksheet in Publication 972, use Parts II through IV of Schedule 8812 to see if you can take the additional child tax credit.

  3. If you have an additional child tax credit on line 13 of Schedule 8812, carry it to Form 1040, line 65, or Form 1040A, line 39.

Completing Schedule 8812 (Form 1040A or 1040)

Schedule 8812 contains four parts, but can really be thought of as two sections. Part I is distinct and separate from Parts II–IV.

If all your children are identified by social security numbers or IRS adoption taxpayer identification numbers and you are not claiming the additional child tax credit, you do not need to complete or attach Schedule 8812 to your tax return.

Part I

You only need to complete Part I if you are claiming the child tax credit for a child identified by an IRS individual taxpayer identification number (ITIN). When completing Part I, only answer the questions with regard to children identified by an ITIN; you do not need to complete Part I of Schedule 8812 for any child that is identified by a social security number (SSN) or an IRS adoption taxpayer identification number (ATIN). If all the children for whom you checked the box in column 4 of line 6c on your Form 1040 or Form 1040A are identified by an SSN or an ATIN, you do not need to complete Part I of Schedule 8812.

Parts II–IV

Parts II–IV help you figure your additional child tax credit. Generally, you should only complete Parts II–IV if you are instructed to do so after completing the Child Tax Credit Worksheet in your tax return instructions or Publication 972. See How to claim the additional child tax credit , earlier.


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