If you cannot claim the entire amount of your child tax credit because it exceeds your tax, don’t be discouraged, because you may be able to claim the unused portion as an additional child tax credit. The additional child tax credit is a refundable credit, and is available to you whenever you cannot claim the entire amount of the child tax credit.
The amount of the refund, however, may differ depending on your total earned income. It may also be affected by the amount of Social Security and Medicare taxes that were paid.
Figuring and Claiming the Credit:
The amount of the additional child tax credit that you can claim on your income tax is the lower of:
• Your disallowed child tax credit.
• 15% of your earned income that exceeds $3,000.
You figure and claim this credit by completing Form 8812, Additional Child Tax Credit, and attaching it to Form 1040.
(Note that off the shelf tax software, such as Turbo Tax, will effectively complete this form and include it in your tax return).
The primary objective of this article is to empower taxpayers to learn to do their own taxes. For detailed information on how to claim all your tax credits, grab yourself a copy of “Doing Your Own Taxes is as Easy as 1, 2, 3” ($6.98) on TaxConnections.com.
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