Child Tax Credit

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:

  • The qualifying child must be under age 17 at the end of the year.
  • The qualifying child must be one of these:
    • U.S. citizen
    • U.S. national
    • U.S. resident

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.

Income phase-out

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:

  • $75,000 if filing as single, head of household, or qualifying widow(er)
  • $110,000 if married filing jointly
  • $55,000 if married filing separately

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:

  • Your earned income must be more than $3,000 for 2017.
  • You must have three or more qualifying children.

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:

  • Claim a refundable credit if the net Social Security and Medicare tax you paid is more than your Earned Income Credit (EIC), if any
  • Use the 15% method described earlier

In all cases, the credit is:

  • Limited to $1,000 per qualifying child
  • Reduced by the nonrefundable portion of the child tax credit

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.

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