| Pub. 17, Your Federal Income Tax |
2004 Tax Year |
Chapter 36 - Child Tax Credit
This is archived information that pertains only to the 2004 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
Introduction
The child tax credit is a credit that you may be able to take on your tax return. It may reduce your tax by as much as $1,000
for each of your
qualifying children.
The additional child tax credit is a credit you may be able to take if you are not able to claim the full amount of the child
tax credit.
This chapter explains:
The child tax credit and the additional child tax credit should not be confused with the child and dependent care credit
discussed in
chapter 34.
If you have no tax.
Credits, such as the child tax credit, the adoption credit, or the credit for child and dependent care expenses, are
used to reduce tax. If your
tax on Form 1040, line 45, or Form 1040A, line 28, is zero, do not figure the child tax credit because there is no tax to
reduce. However, you may
qualify for the additional child tax credit on line 67 (Form 1040) or line 42 (Form 1040A).
Useful Items - You may want to see:
A qualifying child for purposes of the child tax credit must be all of the following.
-
Claimed as your dependent on line 6c of Form 1040 or Form 1040A.
-
Under age 17 at the end of 2004.
-
Your:
-
Son, daughter, adopted child, stepchild, or a descendant of any of them (for example, your grandchild),
-
Brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your niece or nephew) whom you cared
for as you would
your own child, or
-
Foster child (any child placed with you by an authorized placement agency whom you cared for as you would your own child).
-
A U.S. citizen or resident alien.
Example.
Your son turned 17 on December 30, 2004. He is a citizen of the United States and you claimed him as a dependent on your return.
He is not a
qualifying child for the child tax credit because he was not under age 17 at the end of 2004.
Adopted child.
An adopted child is always treated as your own child. An adopted child includes a child placed with you by an authorized
placement agency for legal
adoption even if the adoption is not final.
Kidnapped child.
A kidnapped child is treated as a qualifying child for the child tax credit if both of the following statements are
true.
-
The child is presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family
or the child's
family.
-
The child qualified as your dependent for the part of the year before the kidnapping.
This treatment applies for all years until the child is returned. However, the last year this treatment can apply is the
earlier of:
-
The year there is a determination that the child is dead, or
-
The year the child would have reached age 16.
The maximum amount you can claim for the credit is $1,000 for each qualifying child.
You must reduce your child tax credit if either (1) or (2) applies.
-
The amount on Form 1040, line 45 or Form 1040A, line 28 is less than the credit. If this amount is zero, you cannot take this
credit because
there is no tax to reduce. But you may be able to take the additional child tax credit. See Additional Child Tax Credit, later.
-
Your modified adjusted gross income (AGI) is above the amount shown below for your filing status.
-
Married filing jointly - $110,000.
-
Single, head of household, or qualifying widow(er) - $75,000.
-
Married filing separately - $55,000.
Modified AGI.
For purposes of the child tax credit, your modified AGI is your AGI plus the following amounts that may apply to you.
-
Any amount excluded from income because of the exclusion of income from
Puerto Rico.
-
Any amount on line 43 or line 48 of Form 2555, Foreign Earned Income.
-
Any amount on line 18 of Form 2555-EZ, Foreign Earned Income Exclusion.
-
Any amount on line 15 of Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa.
If you do not have any of the above, your modified AGI is the same as your AGI.
AGI.
Your AGI is the amount on Form 1040, line 37, or Form 1040A, line 22.
To claim the child tax credit, you must file Form 1040 or Form 1040A. You cannot claim the child tax credit on Form 1040EZ.
You must provide the
name and identification number (usually a social security number) on your tax return for each qualifying child.
Answer the Questions in your form instructions for Form 1040, line 51 or Form 1040A, line 33 to find out which child tax credit
worksheet you can use to figure the credit.
If you answer “Yes” to question 1, 2, or 3 in your Form 1040 instructions or question 1 or 2 in your Form 1040A instructions, you must
complete the child tax credit worksheet in Publication 972. Otherwise, you can use the Child Tax Credit Worksheet in your Form 1040 or Form
1040A instructions. (See the filled-in example, later.)
Amy Brown files as head of household and has two dependent children under age 17. The children are qualifying children for
purposes of the child
tax credit. Amy's only income is her salary of $23,500. Amy chooses to itemize her deductions and files Form 1040. Her AGI,
shown on line 37 of her
Form 1040, is $23,500. This is her taxable earned income.
Amy does not file Form 2555, 2555-EZ, or 4563. She does not exclude income from Puerto Rico. Her modified AGI is $23,500.
Amy's tax, shown on line 45 of her Form 1040, is $708. She claims a $437 credit for child and dependent care expenses on line
47. She claims a
$2,302 earned income credit on line 65a. She has no other credits.
After answering the Questions in the Form 1040 instructions for line 51, she completes the child tax credit worksheet to figure her
child tax credit of $271. Amy's completed questions and child tax credit worksheet are shown later.
Amy reads the TIP in the worksheet and finds that she may be able to take the additional child tax credit. See Additional Child Tax
Credit and Amy's completed Form 8812, later.
Additional Child Tax Credit
This credit is for certain individuals who get less than the full amount of the child tax credit. The additional child tax
credit may give you a
refund even if you do not owe any tax.
How to claim the additional child tax credit.
To claim the additional child tax credit, follow the steps below.
-
Make sure you figured the amount, if any, of your child tax credit. See Claiming the Credit, earlier.
-
If you answered “Yes” on line 4 or line 5 of the Child Tax Credit Worksheet in the Form 1040 or Form 1040A instructions, or
line 13 of the Child Tax Credit Worksheet in Publication 972, use Form 8812 to see whether you can take the additional child tax
credit.
-
If you have an additional child tax credit on line 13 of Form 8812, carry it to Form 1040, line 67 or Form 1040A, line 42.
Checking Your Withholding
The child tax credit decreases your tax. You can check your tax withholding by using Publication 919, How Do I Adjust My Tax
Withholding.
If you are having too much tax withheld, and you prefer to have the money during the year, you may
be able to decrease your withholding. You do this by completing a new Form W-4 and giving it to your employer.
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