Beginning in 2001, the child tax credit allows you to claim
a credit of $600 for each qualifying child. The credit is
scheduled to change as follows:
| Taxable Year |
Credit Amount Per
Child |
| 2002 |
$600 |
| 2003-2004 |
$1,000 |
| 2005-2008 |
$700 |
| 2009 |
$800 |
| 2010 |
$1,000 (1) |
(1) The credit reverts to $500 in 2011 and later years.
A
qualifying child is an individual under the
age of 17 for whom you can claim a dependency exemption and
deduction and who is your child or other direct descendent,
or a stepchild or eligible foster child. Although you must
be entitled to a dependency deduction for the child, that
deduction isn't reduced or otherwise modified because of the
child tax credit.
The credit is phased-out for certain higher income
taxpayers. Specifically, the amount of the credit allowable
is reduced by $50 for each $1,000 (or part of $1,000) of
modified adjusted gross income (generally, the dollar amount
shown on the last line of page 1 of your individual income
tax return) above a threshold amount, i.e., $110,000 on a
joint return, $75,000 for single filers and heads of
household, and $55,000 for married individuals who file
separate returns. This means, for example, that in a year
when the credit is $600, a married couple filing jointly who
have one qualifying child are entitled to a credit of $550
if their modified adjusted gross income is more than
$110,000 but not more than $111,000. They lose the credit
completely if their modified adjusted gross income is more
than $121,000.
If the otherwise allowable child tax credit is more than the
amount of income tax you owe, the excess may be refunded
subject to certain limitations.
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