Don’t forget to claim the Child Tax Credit

Posted on March 4, 2010
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This year the child tax credit has been increased. The reason for the increase is mainly due to the increased cost to raise children and to stimulate the economy. This credit is separate from your personal child exemption that you normally take and is a great way to get some money back.

The credit is limited to 1,000.00 per qualifying child you have residing in the U.S and must be under 17 before December 31 and must be living with you more that 6 months during the year.

If you don’t owe any tax, you may still qualify for a refund if you meet other criteria. For 2009, the income threshold for the child tax credit has been temporarily lowered to $3,000 (the income threshold for 2008 was $8,500). This means that, so as long as you have one or more qualifying children and earned income of more than $3,000, you may be entitled to a refund.

The next test is based on your AGI (adjusted gross income). If your AGI is greater than the following conditions then your child tax credit will be reduced.

* Married filing jointly up to $110,000.00 * Single, qualifying widow(er), or head of household up to $75,000.00 * Married filing separately up to $55,000.00

If you AGI exceed the above conditions you may still get the credit but you must reduce the credit by 50.00 dollars for every 1,000.00 dollars over the above limits. For example if your income is 140,000.00 you would reduce you credit by 3 times 50.00 or 150.00.

If you do not have enough tax to reduce then no child tax credit can be taken. If you see a lower amount than the full $1,000.00 credit then you should check to see if you qualify for the additional child tax credit.

The additional tax credit is for certain individuals that get less than the full child tax credit. The additional child tax credit may give you a refund even if you don’t owe any taxes.

Concerned about your income tax like Michael is take a look at the other articles available at Income Tax Site

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