Child Tax Credit

You may be able to claim a child tax credit if you have a qualifying child.

A qualifying child is a child who:

• Is a United States citizen, a United States resident, or a national of the United States,
• Is under age 17 at the end of the calendar year in which your tax year begins,
• Is your son, daughter, stepson, stepdaughter, legally adopted child, or a child placed with you for legal adoption, brother, sister, stepbrother, stepsister, foster child placed with you by an authorized placement agency or by a court order, or a descendant of any such person, and who
• Shares with you the same principal place of abode for more than one-half of the tax year, or is treated as your qualifying child under the special rule for parents who are divorced, separated, or living apart.

For more information, refer to Publication 501, Exemptions, Standard Deduction, and Filing Information.

The credit is limited if your modified adjusted gross income is above a certain amount. The amount at which this phase-out begins depends on your filing status. You can find the phase-out range for your filing status in the Publication 972, Child Tax Credit.

In general, the child tax credit is limited also by the sum of your income tax liability and any alternative minimum tax liability. For example, if the amount of the credit is $600, but the amount of your income tax is $500, the credit ordinarily will be limited to $500. However, there are two exceptions to this general rule. First, if the amount of your child tax credit is greater than the amount of your income taxes, you may be able to claim an "additional" tax child tax credit if your earned income exceeds the base amount for the year. Second, if you have three or more qualifying children, you may be able to claim an additional child tax credit up to the amount of Social Security taxes you paid during the year, less any earned income credit you receive. If you qualify under both these exceptions, you receive the greater of the two additional amounts. You can find the base amount, as well as more information on qualifying with three or more children in the Publication 972, Child Tax Credit.

The total amount of the child tax credit and any additional child tax credit cannot exceed the maximum amount allowed for the taxable year. You can find the maximum amount allowed in Publication 972, Child Tax Credit.

Hurricanes Katrina, Rita and Wilma victims can elect to compute their 2005 Additional Child Tax Credit based on their larger 2004 earned income. Refer to Your 2004 Earned Income Option for additional instructions. Victims of other Hurricanes cannot take this election.

Individuals entitled to receive the child tax credit and additional child tax credit may also be eligible to receive the child and dependent care credit and the earned income credit.

Follow your Form 1040 Instructions or Form 1040A Instructions and complete the child tax credit worksheet. Certain taxpayers may also have to complete worksheets in Publication 972, Child Tax Credit. Use Form 8812 (PDF) to figure the additional child tax credit and attach it to your return.

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