Did you know that your kids can save you a lot of money when tax time comes? The child tax credit can subtract a sum out of your tax bill as long as your child is under 17 and has met the qualifications set by the Internal Revenue Service (IRS). Check out this information on how much child tax credit you can take advantage of.
Amount Of Child Tax Credit
The maximum amount of child tax credit that you can deduct is $1,000 per child.
The amount is a non-refundable credit from the IRS that can be deducted from your tax bill.
Consider These Factors
- Adjusted Gross Income (AGI). Your gross income can very well determine how much child tax credit you can get from the IRS. Your credit starts phasing out when your AGI exceeds the amount set by the government, which is $110,000 if you are married, $55,000 if you file separately, and $75,000 if you are single. This means that $50 will be deducted from your child tax credit per $1,000 that you have exceeded in your calculated and declared AGI. Check out a quick explanation of how the income limit works at Turbo Tax.
- Number of children. How many children below 17 years do you have? You can get a maximum of $1,000 child tax credit per child.
- Tax Owed. In some cases, you can have more child tax credit than the amount of tax billed to you. When this happens, your tax bill is zeroed and all the remaining credits are lost.
- Make sure that your children meet the qualifying criteria as set by the IRS in terms of age, relationship, citizenship, residence, and the like. Read this Ten Facts About The Child Tax Credit from the IRS website.
Tips Before You Get Child Tax Credit
Before you can calculate your child tax credit, you need to complete the following forms first: Form 1040, 1040A or 1040N, Form 2555-EZ, and Form 4563 9if applicable)
Check out this Child Tax Credit Worksheet (page 4) from the IRS website to calculate how much child tax credit you are entitled to.
In some cases, if your tax liability is less than your child tax credit, you can claim for additional child tax credit. This refers to a refund of your credit through check. Calculate your additional child tax credit here. Learn more about the additional child tax credit from Investopedia.com.