Business, Legal & Accounting Glossary
The Child Tax Credit is a nonrefundable credit offered by the IRS for families with children who meet five IRS qualifying tests. Depending on income levels, the amount of the Child Tax Credit can be up to $1,000 per child. The Child Tax Credit represents a dollar-for-dollar reduction in a taxpayer’s income tax liability. The Child Tax Credit is typically capped at the amount of income tax owed (including AMT if applicable). However, if a taxpayer is unable to claim the entire Child Tax Credit due to these limitations, such taxpayer may be eligible to file Form 8812 to claim the Additional Child Tax Credit (i.e. supplemental tax credit offered by the IRS).
The Child Tax Credit qualifying tests are:
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This glossary post was last updated: 4th February, 2020 | 1 Views.