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What is the Additional Child Tax Credit?

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Question
What is the Additional Child Tax Credit?

Answer

For 2018, the maximum credit increased to $2,000 per qualifying child. Up to $1,400 of the credit can be refundable for each qualifying child as the additional child tax credit. In addition, the income threshold at which the child tax credit begins to phase out is increased to $200,000, or $400,000 if married filing jointly.

 

 

If you were not allowed the full child tax credit per qualifying child ($2000) on the tax return (1040), you may be eligible for an Additional Child Tax Credit. The Additional Child Tax Credit is not really an additional credit, but rather the refundable portion of the the Child tax credit amount that was not used to reduce your tax due. (ex. You have one child, your maximum child tax credit is $2000 but you have only $500 tax due on your return.  You will recieve $500 CHILD TAX CREDIT on the return and if you qualify, you will then see the remaining $1500 of the credit on the ADDITIONAL CHILD TAX CREDIT line of the form.)  However, the total of the child tax credit and the additional child tax credit will not be more than $2000 per child.

Please open your 1040 to review this section for clarification. 

This credit is for certain people who have at least one qualifying child as defined below:

A qualifying child for purposes of the child tax credit and additional child tax credit is a child who:

  • Is claimed as your dependent on line 6c, and
  • Was under age 17 at the end of the tax year, and
  • Is (a) your son, daughter, adopted child, stepchild, grandchild; (b) your brother, sister, stepbrother, stepsister, or a descendant of your brother, sister, stepbrother, or stepsister (for example, your niece or nephew), whom you cared for as your own child; or (c) a foster child (that is, any child placed with you by an authorized placement agency whom you cared for as your own child), and
  • Is a U.S. citizen or resident alien.

Note: The above requirements are not the same as the requirements to be a qualifying child for the earned income credit.

A child placed with you by an authorized placement agency for legal adoption is an adopted child even if the adoption is not final. An authorized placement agency includes any person authorized by state law to place children for legal adoption.

A grandchild is any descendant of your son, daughter, adopted child, or stepchild and includes your great-grandchild, great great-grandchild, etc.

If you meet these guidelines and are eligible, our program will automatically figure this for you and fill out the appropriate forms based on the answers you provided during the interview.


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Article Details
Views: 1437 Created on: Jun 15, 2013
Date updated: Dec 10, 2018
Posted in: Credits

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