This saving is offered to individual taxpayers with children. The Child Tax Credit is available to provide credit to taxpayers with income below certain established levels. The maximum credit per child is $1000 and is first applied to reduce or eliminate the taxpayer’s tax liability. How does this tax credit work, and does everyone qualify? Well, let’s start with the last question first. Yes, everyone with children qualifies, however the tax credit phases out when income is above $110,000 for married filing jointly, $75,000 for single, head of household, or widow, and $55,000 for married filing separately.

Now, to answer the “how does it work” aspect; the best approach might be to simply break down the requirements, and explain each fully. The child tax credit is the responsibility of the Internal Revenue Service, and the credit issuance is determined through the tax returns the individual taxpayer completes each year. Taxpayers must complete either the 1040 or the 1040A and the IRS form 8812. The IRS will then determine eligibility, and process accordingly; the requirements and limits change each year, so the individual’s eligibility may change each year.

In order to qualify, a family must have earned at least $10,500 in income, and that figure will rise each year, according to inflation. There must also be at least one qualifying child; in order to be classified as a “qualifying child” the child must meet the following requirements: under age 17, claimed on your return as a dependent, must pass the relationship test (son, daughter, stepchild, grandchild, brother, sister, etc.), be a US citizen, and have a social security number.
This article is just a snippet from a larger report I wrote on Canadian and Us Child Tax Credit and their Similarities
Author:Arild Nygard