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The Child Tax Credit May Cut Your Tax

2/24/2014

 
If you have a child under age 17, the Child Tax Credit may save you money at tax time. Here are some key facts the IRS wants you to know about the credit.

• Amount.  The non-refundable Child Tax Credit may help cut your federal income tax by up to $1,000 for each qualifying child you claim on your tax return.

• Qualifications.  A child must pass seven tests to qualify for this credit:

1.  Age test.  The child was under age 17 at the end of 2013.

2.  Relationship test. The child is your son, daughter, stepchild, foster child, brother, sister, stepbrother, or stepsister.  A child can also be a descendant of any of these persons.  For example, your grandchild, niece or nephew will meet this test. Adopted children also qualify.  An adopted child includes a child lawfully placed with you for legal adoption.

3.  Support test.  The child did not provide more than half of his or her own support for 2013.

4.  Dependent test.  You claim the child as a dependent on your 2013 federal income tax return.

5.  Joint return test.  A married child can’t file a joint return with their spouse they are filing jointly only to claim a tax refund.

6.  Citizenship test.  The child must be a U.S. citizen, U.S. national or U.S. resident alien.  For more see Publication 519, U.S. Tax Guide for Aliens.

7.  Residence test.  In most cases, the child must have lived with you for more than half of 2013.

• Limitations.  Your filing status and income may reduce or eliminate the credit.

• Additional Child Tax Credit.  If you get less than the full Child Tax Credit, you may qualify for the refundable Additional Child Tax Credit.  This means you could get a refund even if you owe no tax.

• Schedule 8812.  If you qualify to claim the Child Tax Credit, make sure to check whether you must file Schedule 8812, Child Tax Credit, with your return.  If you qualify to claim the Additional Child Tax Credit, you must complete and attach Schedule 8812.

• Interactive Tax Assistant Tool.  You can use the ITA tool at IRS.gov to see if you can claim the credit.  The tool can answer many of your tax questions.

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  • Home
  • About
    • Book An Appointment
  • Accounting
    • Dashboard
    • Xero+Accountency
    • Xero Intro
    • AutoMagical Accounting
    • QuickBooks >
      • QuickBooks Updates
    • Store
  • Payroll
  • Taxes
    • Dashboard
    • Individuals
    • Businesses
    • Tax Stuff >
      • Individuals >
        • Income >
          • Debt Forgiveness
          • Foreign Income
          • Gambling Income
          • Unemployment
          • Other Income
        • Deductions & Credits >
          • Adoption
          • Charitable Contributions
          • Earned Income Tax Credit
          • Educational Expenses
          • Energy Tax Credits
          • Employee Business Expenses
          • Other Deductions and Credits
        • Affordable Care Act - Individuals
        • Children and Dependents
        • Death
        • Disabled Taxpayers
        • Educators
        • Health Care
        • Identify Theft
        • Marriage and Divorce
        • Military
        • Real Estate
        • Retirement Savings
        • Seniors
        • State Taxes
        • Record Keeping
        • Who Must File
        • Other Topics
      • Businesses >
        • Affordable Care Act - Businesses
        • Year-end Reporting Obligations >
          • 1099's
          • Health Insurance Premiums
          • Depreciation
          • Reimbursed Employee Business Expenses
          • Company Automobiles
        • Employment Tax Credits
        • Independent Contractors
        • Tax Credits and Deductions for Businesses
        • Other Business Topics
        • Required Business Posters
      • Amended Returns
      • IRS Notices and Problems
      • Tax Plan >
        • All About the Earned Income Tax Credit
        • 5 IRS Audit Red Flags
        • Retirement Plans for Sole Proprietors
        • Are You Claiming All of Your Tax-Deductable Business Expenses for 2015?
        • All About Past Due Tax Returns
        • Do You Need to File Form 1099s?
        • How to File an Appeal with the IRS
        • Why You Might Get a Letter from the IRS, and What to Do
        • How to File an Amended Tax Return
        • Should You Claim the Home Office Deduction?
        • How to Avoid -- And Deal with -- Identify Theft
        • Q & A: IRS Audits
        • Are You Using the Right Business Structure?
        • Starting Planning for 2015 Income Taxes Now: 5 Tips
        • What You Need to Know About Estimated Taxes
        • Contractor or Employee? How the Income Tax Obligations Differ
        • The New Form 1095-A: Reporting Health Insurance Coverage
        • Are Your Social Security Payments Taxable?
        • Do You Qualify for the Earned Income Tax Credit?
        • Are You Eligible for Health Insurance Tax Credits
        • Employee Retirement Plans - Tax Advantages and Other Benefits
        • 5 Business Tax Credits You May Be Missing
        • New Business in 2012
        • Is it a Bad Debt or a Simple Revenue Loss? Telling the Difference
        • Business Taxes Add Complexity: How Will This Affect You?
      • Tax Scams