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The child tax credit is worth up to $1,000 for each qualifying child. This credit can be both a nonrefundable and a refundable credit. The refundable portion of the child tax credit is called the additional child tax credit.
To qualify for the child tax credit, both of these must apply:
Divorced and separated parents
The parent who claims the child as a dependent is eligible to claim the child tax credit. This is true even if the parent's filing status is married filing separately.
As your modified adjusted gross income (AGI) increases, the child tax credit begins to phase out. The credit is reduced $50 for every $1,000 -- or portion of $1,000 -- that your modified AGI is more than:
For the purpose of this credit, your modified AGI is your AGI plus foreign earned income, if any.
Interaction with other credits
You can’t carry forward any portion of the child tax credit to future years. You need to claim the nonrefundable credits in a certain order to get the most benefit. You might need to calculate other credits first to properly apply the child tax credit.
Additional child tax credit
If your child tax credit is limited, you might be able to claim the additional child tax credit. To qualify, one of these must apply:
If you have at least one qualifying child, you can claim a credit of up to 15% of the amount your earned income is more than $3,000. If you have three or more qualifying children, you can either:
In all cases, the credit is:
For the additional child tax credit, include combat pay as part of your earned income.
Use Form 8812: Child Tax Credit to calculate the additional child tax credit.
To learn more, see Publication 972: Child Tax Credit at www.irs.gov.