Introduction
The purpose of this publication is:
To figure the child tax credit you claim on Form 1040, line 52; Form 1040A, line 32; or Form 1040NR, line 47; and
To figure the amount of earned income you enter on line 4a of Form 8812, Additional Child Tax Credit.
This publication is intended primarily for individuals sent here by the instructions to Forms 1040, 1040A, 1040NR and 8812. Even if you were not sent here by the instructions to one of the forms, you can still choose to use this publication to figure your credit. However, most individuals can use the simpler worksheet in their tax form instructions.
This publication includes a detailed example of a taxpayer who figures the child tax credit and the additional child tax credit.
If you were sent here from your Form 1040, Form 1040A, or Form 1040NR instructions
Go to page 4 of this publication and complete the Child Tax Credit Worksheet.
If you were sent here from your Form 8812 instructions
Go to page 8 of this publication and complete the 1040 and 1040NR Filers - Earned Income Worksheet.
If you have not read your Form 1040, Form 1040A, or Form 1040NR instructions
Read the explanation of who must use this publication next. If you find that you are not required to use this publication to figure your child tax credit, you can use the simpler worksheet in the Form 1040, Form 1040A, or Form 1040NR instructions to figure your credit.
Who must use this publication
If you answer “Yes” to any of the following questions, you must use this publication to figure your child tax credit.
Are you excluding income from Puerto Rico or are you filing any of the following forms?
Form 2555 or 2555-EZ (relating to foreign earned income).
Form 4563 (exclusion of income for residents of American Samoa).
Is the amount on Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 36; more than the amount shown next for your filing status?
Married filing jointly - $110,000.
Single, head of household, or qualifying widow(er) - $75,000.
Married filing separately - $55,000.
Are you claiming any of the following credits?
Residential energy credits, Form 5695.
Retirement savings contributions credit, Form 8880.
Mortgage interest credit, Form 8396.
District of Columbia first-time homebuyer credit, Form 8859.
Adoption credit, Form 8839.
Child Tax Credit
This credit is for people who have a qualifying child as defined on this page. It is in addition to the credit for child and dependent care expenses (on Form 1040, line 47; Form 1040A, line 29; or Form 1040NR, line 44) and the earned income credit (on Form 1040, line 66a; or Form 1040A, line 40a).
The maximum amount you can claim for the credit is $1,000 for each qualifying child.
Qualifying Child
A qualifying child for purposes of the child tax credit is a child who:
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),
Was under age 17 at the end of 2007,
Did not provide over half of his or her own support for 2007,
Lived with you for more than half of 2007 (see Exceptions to time lived with you below), and
Was a U.S. citizen, a U.S. national, or a U.S. resident alien. If the child was adopted, see Adopted child below.
For each qualifying child, you must either check the box on Form 1040 or Form 1040A, line 6c, column (4); Form 1040NR, line 7c, column (4); or complete Form 8901 (if the child is not your dependent).
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 2007, that child meets condition (5) 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 all of 2007 if the child was born or died in 2007 and your home was this child's home for the entire time he or she was alive. Temporary absences for special circumstances, such as for school, vacation, medical care, military service, or detention in a juvenile facility, count as time lived with you. There are also exceptions for kidnapped children and children of divorced or separated parents. For details, see the instructions for Form 1040, lines 52 and 6c; Form 1040A, lines 32 and 6c; or Form 1040NR, lines 47 and 7c.
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 the instructions for Form 1040, lines 52 and 6c, or Form 1040A, lines 32 and 6c.
Limits on the Credit
You must reduce your child tax credit if either (1) or (2) applies.
The amount on Form 1040, line 46; Form 1040A, line 28; or Form 1040NR, line 43; 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.
Your modified adjusted gross income (AGI) is above the amount shown below for your filing status.
Married filing jointly - $110,000.
Single, head of household, or qualifying widow(er) - $75,000.
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 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.
AGI
Your AGI is the amount on Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 36.
Claiming the Credit
To claim the child tax credit, you must file Form 1040, Form 1040A, or Form 1040NR. You cannot claim the child tax credit on Form 1040EZ or Form 1040NR-EZ. You must provide the name and identification number (usually a social security number) on your tax return (or Form 8901) for each qualifying child.
Earned Income
You will need to figure your earned income using one of the worksheets in this publication if you are completing the Line 11 Worksheet (page 6) or Form 8812. Form 1040 or Form 1040NR filers, use the worksheet on page 8 to figure your earned income. Form 1040A filers, use the worksheet on page 9.
For this purpose, earned income includes only:
Taxable earned income, and
Nontaxable combat pay.
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.
Make sure you figured the amount, if any, of your child tax credit.
If you answered “Yes” on line 4 or line 5 of the Child Tax Credit Worksheet in the Form 1040, Form 1040A, or Form 1040NR instructions (or on line 13 of the Child Tax Credit Worksheet in this publication), use Form 8812 to see if you can take the additional child tax credit.
If you have an additional child tax credit on line 13 of Form 8812, carry it to Form 1040, line 68; Form 1040A, line 41; or Form 1040NR, line 62.
Child Tax Credit Worksheet. page 1
Child Tax Credit Worksheet. page 2
Line 11 worksheet page 1
Line 11 worksheet page 2
1040 and 1040NR Filers - Earned Income Worksheet
| Before you begin: | ||||||||
✓Use this worksheet only if you were sent here from the Line 11 Worksheet on page 6 of this publication or line 4a of Form 8812, Additional Child Tax Credit. ✓Disregard community property laws when figuring the amounts to enter on this worksheet. ✓If married filing jointly, include your spouse's amounts with yours when completing this worksheet. | ||||||||
| 1. | a. | Enter the amount from Form 1040, line 7, or Form 1040NR, line 8 | 1a. | |||||
| b. | Enter the amount of any nontaxable combat pay received. Also enter this amount on Form 8812, line 4b. This amount should be shown in Form(s) W-2, box 12, with code Q. | 1b. | ||||||
| Next, if you are filing Schedule C, C-EZ, F, or SE, or you received a Schedule K-1 (Form 1065 or Form 1065-B), go to line 2a. Otherwise, skip lines 2a through 2e and go to line 3. | ||||||||
| 2. | a. | Enter any statutory employee income reported on line 1 of Schedule C or C-EZ | 2a. | |||||
| b. | Enter any net profit or (loss) from Schedule C, line 31; Schedule C-EZ, line 3; Schedule K-1 (Form 1065), box 14, code A (other than farming); and Schedule K-1 (Form 1065-B), box 9, code J1.* Reduce this amount by any unreimbursed nonfarm partnership expenses you deducted on Schedule E. Do not include any statutory employee income or any other amounts exempt from self-employment tax. Options and commodities dealers must add any gain or subtract any loss (in the normal course of dealing in or trading section 1256 contracts) from section 1256 contracts or related property | 2b. | ||||||
| c. | Enter any net farm profit or (loss) from Schedule F, line 36, and from farm partnerships, Schedule K-1 (Form 1065), box 14, code A.* Reduce this amount by any unreimbursed farm partnership expenses you deducted on Schedule E. Do not include any amounts exempt from self-employment tax | 2c. | ||||||
| d. | If you used the farm optional method to figure net earnings from self-employment, enter the amount from Schedule SE, Section B, line 15. Otherwise, skip this line and enter on line 2e the amount from line 2c | 2d. | ||||||
| e. | If line 2c is a profit, enter the smaller of line 2c or line 2d. If line 2c is a (loss), enter the (loss) from line 2c. | 2e. | ||||||
| 3. | Combine lines 1a, 1b, 2a, 2b, and 2e. If zero or less, stop. Do not complete the rest of this worksheet. Instead, enter -0- on line 2 of the Line 11 Worksheet on page 6 or line 4a of Form 8812, whichever applies | 3. | ||||||
| 4. | Enter any amount included on line 1a that is: | |||||||
| a. | A scholarship or fellowship grant not reported on Form W-2 | 4a. | ||||||
| b. | For work done while an inmate in a penal institution (enter “PRI” and this amount on the dotted line next to line 7 of Form 1040 or line 8 of Form 1040NR) | 4b. | ||||||
| c. | A pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan (enter “DFC” and this amount on the dotted line next to line 7 of Form 1040 or line 8 of Form 1040NR). This amount may be shown in box 11 of your Form W-2. If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or annuity. | 4c. | ||||||
| 5. | a. | Enter any amount included on line 3 that is also included on Form 2555, line 43, or Form 2555-EZ, line 18. Do not include any amount that is also included on line 4a, 4b, or 4c above | 5a. | |||||
| b. | Enter the amount, if any, from Form 2555, line 44, that is also deducted on Schedule C, C-EZ, or F, or included on Schedule E in partnership net income or (loss) | 5b. | ||||||
| c. | Subtract line 5b from line 5a | 5c. | ||||||
| 6. | Enter the amount from Form 1040, line 27 | 6. | ||||||
| 7. | Add lines 4a through 4c, 5c, and 6 | 7. | ||||||
| 8. | Subtract line 7 from line 3 | 8. | ||||||
| ||||||||
| *If you have any Schedule K-1 amounts and you are not required to file Schedule SE, complete the appropriate line(s) of Schedule SE, Section A. Put your name and social security number on Schedule SE and attach it to your return. | ||||||||
1040A Filers - Earned Income Worksheet
| Before you begin: | ||||||
| ✓Use this worksheet only if you were sent here from the Line 11 Worksheet on page 6 of this publication. ✓Disregard community property laws when figuring the amounts to enter on this worksheet. | ||||||
| 1. | a. | Enter the amount from Form 1040A, line 7 | 1a. | |||
| b. | Enter the amount of any nontaxable combat pay received. Also enter this amount on Form 8812, line 4b. This amount should be shown in Form(s) W-2, box 12, with code Q. | 1b. | ||||
| c. | Add lines 1a and 1b. | 1c. | ||||
| 2. | Enter any amount included on line 1a that is: | |||||
| a. | A scholarship or fellowship grant not reported on Form W-2 | 2a. | ||||
| b. | For work done while an inmate in a penal institution (enter “PRI” and this amount next to line 7 of Form 1040A) | 2b. | ||||
| c. | A pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan (enter “DFC” and this amount next to line 7 of Form 1040A). This amount may be shown in box 11 of your Form W-2. If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or annuity | 2c. | ||||
| 3. | Add lines 2a through 2c | 3. | ||||
| 4. | Subtract line 3 from line 1c. Enter the result here and on line 2 of the Line 11 Worksheet on page 6 | 4. | ||||
Detailed Example
Steve and Gretchen Leaf have four children who are all qualifying children for the child tax credit. Steve and Gretchen's adjusted gross income (AGI) (Form 1040, line 38) is $112,000. This amount represents Steve's salary and is considered earned income. They will file a joint return. Assume that their tax (Form 1040, line 46) is $2,000.
Steve and Gretchen have the 2007 Form 1040 tax package and instructions. They want to see if they qualify for the child tax credit, so they follow the steps for line 52 in the instructions.
Step 1
In Step 1 of those instructions Steve and Gretchen determine all four children qualify for the child tax credit.
Step 2
The Leafs check the box in column (4) of line 6c on Form 1040 for each child.
Step 3
In Step 3 the Leafs find out they must use Publication 972 to figure their child tax credit because their AGI is more than $110,000. When they read Publication 972, they find out they must complete the Child Tax Credit Worksheet that begins on page 4.
Completing the Child Tax Credit Worksheet
Steve and Gretchen fill out the worksheet (shown here) to find out how much child tax credit they can claim.
Steve and Gretchen enter the number of qualifying children (4), multiply 4 by $1,000, and enter the result ($4,000) in the box for line 1.
They enter their AGI ($112,000) in the box for line 2.
They enter -0- in the box for line 3 since they did not exclude any income from Puerto Rico or any income on Form 2555, Form 2555-EZ, or Form 4563.
They add $112,000 and $0 and enter the result ($112,000) in the box for line 4.
They enter $110,000 in the box for line 5 since they will file a joint return.
They check the “Yes” box in line 6 since the amount on line 4 ($112,000) is more than the amount on line 5 ($110,000). They subtract line 5 ($110,000) from line 4 ($112,000) and enter the result ($2,000) in the box for line 6.
They multiply the amount on line 6 ($2,000) by 5% (.05) and enter the result ($100) in the box for line 7.
They check the “Yes” box in line 8 since the amount on line 1 ($4,000) is more than the amount on line 7 ($100). They subtract line 7 ($100) from line 1 ($4,000) and enter the result ($3,900) in the box for line 8.
They enter the amount from line 46 of their Form 1040 ($2,000) in the box for line 9.
Steve and Gretchen did not have any of the credits on lines 47, 48, 49, 50, 51, or 53 of Form 1040, so they enter -0- in the box for line 10.
They check the “No” box on line 11 because they are not claiming any of the credits shown on line 11. They enter -0- in the box for line 11.
They subtract the amount on line 11 ($0) from the amount on line 9 ($2,000) and enter the result ($2,000) in the box for line 12.
They check the “Yes” box in line 13 since the amount on line 8 ($3,900) is more than the amount on line 12 ($2,000). They enter the amount from line 12 ($2,000) in the box for line 13. Their child tax credit is $2,000. They enter $2,000 on line 52 of their Form 1040.
Completing Form 8812
They enter the amount from line 8 of their Child Tax Credit Worksheet ($3,900) on line 1.
On line 2, they enter the amount of their child tax credit ($2,000) from line 52 of their Form 1040.
Steve and Gretchen subtract the amount on line 2 ($2,000) from the amount on line 1 ($3,900) and enter the result ($1,900) on line 3.
Before completing line 4a, they read the instructions on the back of the form and find they should enter the amount from line 7 of their Form 1040 ($112,000) on line 4a.
Neither Steve nor Gretchen had any nontaxable combat pay, so they leave line 4b blank.
Since the amount on line 4a ($112,000) is more than $11,750, they check the “Yes” box on line 5, and subtract $11,750 from the amount on line 4a ($112,000) and enter the result ($100,250) on line 5.
They multiply the amount on line 5 ($100,250) by 15% (.15) and enter the result ($15,038) on line 6. Next, they are asked if they have three or more qualifying children. Steve and Gretchen check the “Yes” box. Since line 6 ($15,038) is more than line 3 ($1,900), they skip Part II and enter the amount from line 3 ($1,900) on line 13. This $1,900 is their additional child tax credit. They also enter this amount on line 68 of their Form 1040.
Leaf's Child Tax Credit Worksheet page 1
Leaf's Child Tax Credit Worksheet page 2
Leaf's Filled-in Form 8812
Paperwork Reduction Act Notice
We ask for the information on the worksheets in this publication to carry out the Internal Revenue laws of the United States. You are required to give us the information if requested. We need it to ensure that you are complying with these laws and to allow us to figure and collect the right amount of tax. You are not required to provide the information requested on a form (or worksheet in this publication) that is subject to the Paperwork Reduction Act unless the form (or publication) displays a valid OMB control number. Books or records relating to a form, its instructions, or this publication must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103. The average time and expenses required to complete these worksheets will vary depending on individual circumstances. For the estimated averages, see the instructions for your income tax return. If you have suggestions for making these worksheets simpler, we would be happy to hear from you. See Comments and suggestions, earlier.
