What is the Child Tax Credit?

Admin — Fri, 20 Apr 2012 12:30:10 +0000

When you’re doing your taxes, the name of the game is to pay as little as possible. Finding out legal ways to pay less on your tax bill is a full time profession for many but there are some deductions that are quite straightforward and you can figure them out yourself. One of these is the child tax credit. There is a simple child tax credit worksheet to help you do this.

If you have children, then you may be able to reduce your Adjusted Gross Income, which means you can lower the amount of taxes you owe the IRS. The child tax credit is basically a little boost in the wallet for people who have children. In a nutshell, the 2011 child tax credit works like this: for every child you have, subtract another thousand dollars off your total taxable income.

If you have three children, and your taxable income is $40,000 then because of the Child Tax Credit your taxable income is now $37,000.

There six easy steps to figuring out if your children qualify to help you reduce your taxes.

Must be under 17. If you are doing your taxes for 2011, the child must not have had his 17th birthday before the end of 2011.
Must legally be your child. Must be your biological child, a stepchild, a foster child, or sibling, stepbrother or stepsister, grandchild, niece, nephew.
Must live with you for more than half the tax year.
Must be a US citizen, US national or resident alien.
Child must not provide more than half his or her support.
You must claim the child as a dependent on your federal taxes.