The Child Tax Credit May Cut Your Tax
Posted by William Byrnes on March 4, 2014
IRS Tax Tip 2014-18 reminds taxpayers whom have a child or children under 17, then the Child Tax Credit may save money at tax time. Key facts the IRS wants taxpayers to know about the Child Tax Credit:
• Amount. The non-refundable Child Tax Credit may help cut the federal income tax by up to $1,000 for each qualifying child claimed on a 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 a son, daughter, stepchild, foster child, brother, sister, stepbrother, or stepsister. A child can also be a descendant of any of these persons. For example, a grandchild, niece or nephew will meet this test. Adopted children also qualify. An adopted child includes a child lawfully placed with a taxpayer 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. Claim the child as a dependent on your 2013 federal income tax return.
5. Joint return test. A married child can not file a joint return with their spouse.
6. Citizenship test. The child must be a U.S. citizen, U.S. national or U.S. resident alien.
7. Residence test. In most cases, the child must have lived with the taxpayer for more than half of 2013.
• Limitations. Taxpayer’s filing status and income may reduce or eliminate the credit.
• Additional Child Tax Credit. If the taxpayer receives less than the full Child Tax Credit, may still qualify for the refundable Additional Child Tax Credit. This means taxpayer may receive a refund even if no tax is owed.
• Schedule 8812. A taxpayer may need to file Schedule 8812, Child Tax Credit, with the tax return. A taxpayer claiming the Additional Child Tax Credit must complete and attach Schedule 8812.
• Interactive Tax Assistant Tool. Use the ITA tool to determine whether it is possible to claim the Child Tax Credit.
Anyone interested can try Tax Facts on Individuals & Small Business, risk-free for 30 days, with a 100% guarantee of complete satisfaction. For more information, please go to www.nationalunderwriter.com/TaxFactsIndividuals or call 1-800-543-0874.