Complete List of Tax Topics

Your Federal Income Tax, Publication 17 (2009)

34. Child Tax Credit

What's New

Definition of qualifying child changed. Beginning in 2009, you must claim the child as a dependent to be a qualifying child for the child tax credit. See Qualifying Child , later, for more information.

Earned income threshold. The earned income threshold generally needed to claim the additional child tax credit is reduced to $3,000.

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.
• How much is the credit.
• How to claim the credit.
• Why you should check your tax withholding.

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.

Useful Items - You may want to see:

Publication

• 972 Child Tax Credit

Form (and Instructions)

• 8812 Additional 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 2009,
3. Did not provide over half of his or her own support for 2009,
4. Lived with you for more than half of 2009 (see Exceptions to time lived with you below),
5. Is claimed as a dependent on your return, and
6. Was a U.S. citizen, a U.S. national, or a resident of the United States. If the child was adopted, see Adopted child below.

For each qualifying child you must check the box on Form 1040 or Form 1040A, line 6c, column (4).

Exceptions to time lived with you.

Qualifying child of more than one person.

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 as a member of your household all year, that child meets condition (6) above to be a qualifying child for the child tax credit.

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 line 46, Form 1040, or line 28, Form 1040A, 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 above 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 line 38, Form 1040, enter the amount excluded and identify 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.

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 are filing Form 1040 answer the Questions in your form instructions for line 51, Form 1040, to find out which child tax credit worksheet you can use to figure the credit.

If you answer “Yes” to question 1 or 2 in your Form 1040 instructions, you must complete the child tax credit worksheet in Publication 972. Otherwise, you can use the Child Tax Credit Worksheet in your Form 1040 or Form 1040A instructions. (See the filled-in example, later.)

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 instructions or line 9 or 10 in the Form 1040A instructions, or line 13 of the Child Tax Credit Worksheet in Publication 972, use Form 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 Form 8812, carry it to line 65, Form 1040, or line 42, Form 1040A.

Checking Your Withholding

The child tax credit decreases your tax. You can check your tax withholding by using Publication 919, How Do I Adjust My Tax Withholding.

If you are having too much tax withheld, and you prefer to have the money during the year, you may be able to decrease your withholding. You do this by completing a new Form W-4 and giving it to your employer.

Example

Amy Brown files as head of household and has two dependent children under age 17. The children are qualifying children for purposes of the child tax credit. Amy's only income is her salary of $30,450. Amy chooses to itemize her deductions and files Form 1040. Her AGI, shown on line 38 of her Form 1040, is $30,450. This is her taxable earned income.

Amy does not file Form 2555, 2555-EZ, or 4563. She does not exclude income from Puerto Rico. Her modified AGI is $30,450.

Amy's tax, shown on line 46 of her Form 1040, is $1,108. She claims a $225 credit for child and dependent care expenses on line 48. She claims a $2,089 earned income credit on line 64a. She has no other credits.

After answering the Questions in the Form 1040 instructions for line 51, she completes the child tax credit worksheet to figure her child tax credit of $883. Amy's completed questions and child tax credit worksheet are shown later.

Amy reads the TIP in the worksheet and finds that she may be able to take the additional child tax credit. See Additional Child Tax Credit and Amy's completed Form 8812, later.

Filled-in Questions for Amy Brown

Filled-in child tax credit worksheet for Amy Brown

Filled-in child tax credit worksheet for Amy Brown (page 2).

Filled-in Form 8812