Instant Savings for Parents

The child tax credit can save most parents money at tax time, though the requirements for qualifying are not as simple as it may first appear.

This page:

  • Makes clear who can claim the 2006 child tax credit

  • Lists basic criteria needed to qualify

  • Alerts you to another credit you can possibly claim

Note: this credit is not to be confused with the child care tax credit.

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This credit can save most parents money.

This credit is equal to $1,000 for every qualifying child. The child does not have to be your own, but you must have contributed to more than half of the child's support and have had the child living with you for more than half the year.

To qualify in 2006, the child must be:

  • Under 17 on December 31st
  • Your son, daughter, adopted child, foster child, stepchild or
  • Your grandchild, great-grandchild, or great-great-grandchild

Income requirements of the child tax credit

For 2006, the credit has a maximum worth of $1,000 per dependent child. However, your income can reduce the credit or, if you exceed certain income limits, make you entirely ineligible for it.

The amount you are allowed to claim is limited on the basis of your modified adjusted gross income.

Your credit amount is affected if your modified adjusted gross income exceeds:

  • $110,000 if you are married filing jointly
  • $55,000 if you are married filing separately
  • $75,000 if you are single


NOTE: this does not mean that if your income exceeds these limits, you cannot claim this credit. Instead, the claimable amount decreases by $50 for every $1000 you are above the income treshold.

Sidebar
If you do your taxes online, your adjusted gross income and final child tax credit will be calculated automatically after you submit some basic information.
You can e-file with TurboTax , where you can easily consult the on-hand tax professionals, should you need to. Plus, you'll be able to work on your tax return for free, until you decide to file.

When claiming the child tax credit, you will need to provide the child's information on your return. The IRS requires that you supply the child's name, birth date and social security number. Other legal identification numbers can be used in instances where the child does not have a social security number. Without this information, you are ineligible to claim any portion of this credit.

The additional child tax credit

If you provide a home and support for more than two children, you may also qualify for this additional credit.

The additional child tax credit is a refundable credit, which means it can reduce your tax below zero - guaranteeing you a refund.

Like with the regular credit, your eligibility is dependent on your modified adjusted gross income. However, the calculation is a fairly complicated process, and mistakes are common. In fact the IRS names the additional child tax credit as one of the most common sources of mistakes on returns.
Avoid mistakes: e-file your return.

Related IRS publications

If you claim the additional child tax credit you will need to attach Form 8812 with your return. (If you e-file, this is done for you electronically.)

You can get Form 8812 directly from the IRS, along with Publication 972 which explains all the requirements of claiming this credit.

Note: you will need an Adobe Acrobat Reader to view these publications, which you can get here.