The IRS child tax credit rules can be confusing. As individuals prepare federal income tax returns, they will see that line 51 on page 2 of Form 1040 simply reads “child tax credit (see page 42).” But what does that mean? And how much is the child credit?
2009 Child Tax Credit Rules
In this article, learn information about the child tax credit (for 2009 taxes) and where to go for additional information about this federal government tax break for people with qualifying dependents.
IRS Child Tax Credit – See Form 1040 Instructions, Publication 972
Individuals will find information on the federal tax credit for dependents beginning on page 42 of the 2009 Form 1040 instructions. Taxpayers will also need to refer to page 17 of the 2009 Form 1040 instructions in order to determine if they have any qualifying children for the 2009 child tax credit.
Some taxpayers will need to refer to Publication 972 for further guidance, as the Child Tax Credit Worksheet in the Form 1040 instructions isn’t comprehensive enough to consider all tax situations. As a taxpayer reviews the Form 1040 instructions beginning on page 42, he or she will be directed to Publication 972 if necessary.
2009 Child Tax Credit – How Much & When Eligibility Phase Out Begins
At most, taxpayers are allowed $1,000 per qualifying child. Individuals with modified adjusted gross income (AGI) above these thresholds will begin to phase out of the child tax credit:
- Married filing jointly - $110,000
- Single, head of household, or qualifying widow(er) - $75,000
- Married filing separately - $55,000
2009 Taxes – Who Qualifies for Federal Tax Credit for Dependents
A large number of U.S. taxpayers who have at least one qualifying child, make under a certain amount of income, and don’t partake in advanced income tax planning strategies will qualify for the child credit. Many people wonder how many children per household are eligible for the credit. There is really no cap on this, except that the child credit cannot reduce tax liability below zero (resulting in a refund of the excess).
In a nutshell, anyone caring for a dependent who is eligible for the child tax credit may claim up to $1,000 for that child. Certain income limitations and other bars to claiming the full $1,000 tax credit per child exist, but those exceptions are too numerous and dependent upon intermingling factors to be listed definitively in a single article. Only a taxpayer who completes the Child Tax Credit Worksheet in Publication 972 or the Form 1040 instructions will be able to tell for sure how much of a credit he or she is eligible for.
2009 Tax Credit for Children – Complex IRS Rules
There are a multitude of reasons someone would not qualify to take the dependent tax credit. Among other limitations, the child tax credit phases out over varying income levels depending on filing status, dependents must be under a certain age, no one else can claim the same child, and the taxpayer must provide over half of the child’s support during the tax year.
The article IRS Child Tax Credit Rules discusses who doesn’t qualify for the 2009 child tax credit for these and other reasons; the article also discusses who is considered a dependent for purposes of this credit.
How to Claim $1,000 Child Tax Credit – Which Form to Use
There is no special form required to claim the child tax credit. Individuals must claim the amount on their individual income tax returns. However, Form 1040EZ and Form 1040NR-EZ cannot be used to claim the federal tax credit for children and other dependents. One of the following IRS forms are required: Form 1040, Form 1040A, or Form 1040NR.
Below is exactly where taxpayers need to claim a child tax credit on each tax form (once it is calculated using the Child Tax Credit Worksheet in Publication 972 or the individual income tax return instructions):
- Form 1040 – Line 51
- Form 1040A – Line 33
- Form 1040NR – Line 47
Child Credit Questions & Other U.S. Federal Government Tax Credits
2009 taxes are complex, but all of the information needed to prepare individual federal income tax returns is available online at irs.gov. Any questions that can’t be answered by documents accessed online can be addressed by calling the IRS hotline. The instructions for the form(s) in question should contain phone contact information for the IRS.
For information about other United States federal government tax credits, see the following articles:
$6,500 Tax Credit for Home Purchase
$8,000 First-Time Home Buyer Tax Credit
Resources:
2009 Form 1040, U.S. Individual Income Tax Return and Form 1040 instructions. Retrieved from irs.gov on January 24, 2010.
2009 Form 8812, Additional Child Tax Credit. Retrieved from irs.gov on January 25, 2010.
Publication 972, Child Tax Credit (for use in preparing 2009 returns). Retrieved from irs.gov on January 24, 2010.
Lena Gott - Lena Gott is a Certified Public Accountant who gives practical financial advice to her readers.
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