Tax Credit for Children
If you have children you may qualify for a tax credit for children. Many people think this credit reduces their taxable income. That, however, is not true; it actually reduces the amount of tax owed. The tax credit for children is a credit which is very different form a deduction.
How much is the child tax credit?
In 2004, congress passed the Working Families Tax Relief Act of 2004 that will continue to keep the child tax credit at $1,000 per qualifying child through 2010. In order to qualify for this credit, your income must fall within a certain income level and the credit cannot be more than your income tax liability.
The income level limits are as follows and are according to your filing status:
How do I know if my child qualifies?
Your child must meet some of the following criteria:
How do I claim the tax credit for children?
In order to claim the child tax credit you must file form 1040 or 1040A. You cannot claim the credit on form 1040EZ. Visit TurboTax to make claiming a tax credit for your children easy!
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