2010 Child Tax Credit Amount Worth Up to $1K per Qualifying Child, Highlights Harbor Financial
January 23, 2010 (PRLEAP.COM) Business NewsHarbor Financial today highlights the child tax credit which is worth as much as $1,000 per qualifying child. The child tax credit is based on the age of children in the home and the income level of the taxpayer. This tax credit might also possibly turn into a tax refund.
Tax Credit Reduces Dollar for Dollar
A child tax credit reduces the tax bill dollar for dollar which different than a deduction. The tax credit allows individuals to take dollars right off the tax bill. The tax deduction would reduce the income used to determine the tax bill.
How to Qualify for Child Tax Credit
The dependent must be a United States citizen or resident and under the age of 17. The dependent can be a blood related child, or adopted child, stepchild, grandchild, or great-grandchild. Under a recently revised definition of a qualifying child, the qualifying dependent could also be a sibling, step-siblings, or half-siblings. Foster children also qualify if placed by a court or authorized agency. The taxpayer must provide a home for the dependent for more than half the year and the dependent must not be self supportive. The child's tax identification number must be provided on the income tax return which is usually the child's social security number.
Lack of Tax or High Income May Limit Credit Amount
Income levels may exceed the limits allowed if adjusted gross income is above certain amounts. Income levels that exceed the limits for qualifying for the child tax credit reduce the credit by $50 for every $1,000 over the limit. If the amount on Form 1040, line 46; Form 1040A, line 28; or Form 1040NR, line 43; is less than the credit then, the credit cannot be taken. If this amount is zero then, there is no tax to reduce. If the credit is larger than the tax liability then, the tax bill is just reduced to zero.
Additional Child Tax Credit
In certain cases a child tax credit refund will be given. When the credit exceeds the tax liability, a check for the remaining tax credit will be granted after the tax bill has been reduced to zero. This refundable child tax credit is called the Additional Child Tax Credit. The way to calculate this credit is complicated and professional help will be needed.
How to Videos and Helpful Tax Software
The tutorial videos show how to prepare tax forms accurately with an incredible amount of information on many other tax topics. The tax videos provide visual and audio how to lessons guiding the taxpayer through filling out proper forms with full explanations making filling them out easy to understand.
Harbor Financial Online has helped thousands of taxpayers prepare and file income tax forms, and provides a free tax refund calculator.