559. Who qualifies for the child tax credit?Nuco Employeercline202014-07-29T18:53:00Z2014-07-29T18:53:00Z46843901Hewlett-Packard329457614Site Map/General Income Taxation/Individuals/Credits2005-01-18T00:00:00ZTaxFactsDefaultArticle124071437-00-tf2.xml1437.00;#1722;#0x010100C568DB52D9D0A14D9B2FDCC96666E9F2007948130EC3DB064584E219954237AF3900242457EFB8B24247815D688C526CD44D009C4E67E972694125ABDA91AC61F5E51FTax Facts 2Who qualifies for the child tax credit?
53600.0000000000TaxFactsDefaultArticleSBMEDIA\moss-admin2010-01-14T23:12:12Z559. Who qualifies for the child tax credit?A child tax credit is available for each “qualifying child” (defined below) of eligible taxpayers who meet certain income requirements. The child tax credit is $1,000.IRC Sec. 24(a).The term qualifying child means a “qualifying child” of the taxpayer (as defined under IRC Section 152(c) – see below) who has not attained the age of 17.IRC Sec. 24(c)(1).“Qualifying child” means, with respect to any taxpayer for any taxable year, an individual:(1)who is the taxpayer’s “child” (see below) or a descendant of such a child, or the taxpayer’s brother, sister, stepbrother, or stepsister or a descendant of any such relative;(2)who has the same principal place of abode as the taxpayer for more than one-half of the taxable year; and(3)who has not provided over one-half of such individual’s own support for the calendar year in which the taxpayer’s taxable year begins.IRC Sec. 152(c).Additionally, a qualifying child must be either a citizen or a resident of the United States.IRC Sec. 24(c)(2).The term “child” means an individual who is: (1) a son, daughter, stepson, or stepdaughter of the taxpayer; or (2) an “eligible foster child” of the taxpayer.IRC Sec. 152(f)(1). An “eligible foster child” means an individual who is placed with the taxpayer by an authorized placement agency or by judgment decree, or other order of any court of competent jurisdiction.IRC Sec. 152(f)(1)(C). Any adopted children of the taxpayer are treated the same as natural born children.IRC Sec. 152(f)(1)(B).The amount of the credit is reduced for taxpayers whose modified adjusted gross income (MAGI) exceeds certain levels. A taxpayer’s MAGI is his adjusted gross income without regard to the exclusions for income derived from certain foreign sources or sources within United States possessions. The credit amount is reduced by $50 for every $1000, or fraction thereof, by which the taxpayer’s MAGI, exceeds the following threshold amounts: $110,000 for married taxpayers filing jointly, $75,000 for unmarried individuals, and $55,000 for married taxpayers filing separately.IRC Sec. 24(b)(2).The child tax credit is refundable to the extent of 15 percent of the taxpayer’s earned income in excess of $10,000 (as indexed–see below).IRC Sec. 24(d)(1)(B)(i). For example, if the taxpayer’s earned income is $16,000, the excess amount would be $6,000 ($16,000 - $10,000 = $6,000), and the taxpayer’s refundable credit for one qualifying child would be $900 ($6,000 x 15 percent = $900). For families with three or more qualifying children, the credit is refundable to the extent that the taxpayer’s Social Security taxes exceed the taxpayer’s earned income credit if that amount is greater than the refundable credit based on the taxpayer’s earned income in excess of $10,000.IRC Sec. 24(d)(1). The $10,000 amount is indexed for inflation. But ARRA 2009 reduced the dollar amount to $3,000 for 2009 through 2012.IRC Sec. 24(d)(3). ATRA extended the $3,000 floor amount through 2017.ATRA, Sec. 103. (Prior to 2001, the child tax credit was refundable only for individuals with three or more qualifying children).IRC Sec. 24(d), prior to amendment by EGTRRA 2001.The nonrefundable child tax credit can be claimed against the individual’s regular income tax and alternative minimum tax (see Q 557). The nonrefundable child tax credit cannot exceed the excess of (i) the sum of the taxpayer’s regular tax plus the alternative minimum tax over (ii) the sum of the taxpayer’s nonrefundable personal credits (other than the child tax credit, adoption credit, and saver’s credit) and the foreign tax credit for the taxable year.IRC Sec. 24(b)(3). For tax years beginning after 2001, the refundable child tax credit is not required to be reduced by the amount of the taxpayer’s alternative minimum tax.IRC Sec. 24(d). The nonrefundable credit must be reduced by the amount of the refundable credit.IRC Sec. 24(d)(1).Some additional restrictions applying to the child tax credit include: (1) an individual’s tax return must identify the name and taxpayer identification number (Social Security number) of the child for whom the credit is claimed; and (2) the credit may be claimed only for a full taxable year, unless the taxable year is cut short by the death of the taxpayer.IRC Secs. 24(e), 24(f). For purposes of applying a uniform method of determining when a child attains a specific age, the Service has ruled that a child attains a given age on the anniversary of the date that the child was born (e.g., a child born on January 1, 1987, attains the age of 17 on January 1, 2004).Rev. Rul. 2003-72, 2003-2 CB 346. The IRS stated that it would apply Revenue Ruling 2003-72 retroactively and would notify those taxpayers entitled to a refund for 2002 as a result of Revenue Ruling 2003-72.IRS Information Letter INFO-2003-0215 (8-29-2003).