How Much Tax Credit Per Child

If you're wondering how much tax credit per child is permitted, you'll be happy to know that the government recognizes the expensive nature of childcare and is willing to provide parents and legal guardians with tax relief. A child tax credit is not limited to biological children. It can be claimed on any child under your care, whether it is your child, adopted child, step-child, grandchild or siblings. As long as your family meets specific qualifications, you can claim a tax credit for each child.

What is a child tax credit?
Although often considered a possible tax deduction, the child tax credit is actually a reduction on the amount of taxes owed. Because of this classification, a child tax credit is nonrefundable. All hope for a refund is not lost, however. You can apply a refundable child tax credit, known as the additional child tax credit, in certain circumstances. If the amount of your child tax credit exceeds the amount of money you owe in taxes, you can apply for an additional child tax credit that will refund you the remaining portion. Until 2010, tax payers can receive up to $1000 per child. If you claim one child and owe $200 in taxes, you can then apply for an additional child tax credit in the amount of $800.

The amount of the child tax credit drops for couples who make over $110,000 annually (or $75,000 unmarried). For each $1000 over the threshold amount of $110,000, the child tax credit is reduced by $50.

What are the qualifications for the child tax credit?
Children claimed under the child tax credit must be 17 years of age or younger. The child must be related to you either biologically as your child, your grandchild, your siblings or your spouses' children from a previous relationship. You will also receive a child tax credit for your adopted child. In some cases, when a court has a placed a child in your care, you can claim credit for foster children. In addition to these qualifications, a child must have lived in your house for at least six months of the applying year. The child cannot have provided half of his own support.

Understanding which situations qualify for the child tax credit can help you at tax time. Keep good records, and don't forget that you might be able to get a refund.

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