Federal, State, Local and International Taxes – If you have a child under age 17, the Child Tax Credit may save you money at tax-time. Here are some facts the IRS wants you to know about the credit.
- Amount. The non-refundable Child Tax Credit may help reduce your federal income tax by up to $1,000 for each qualifying child you claim on your return.
- Qualifications. For this credit, a qualifying child must pass seven tests:
- Age test. The child must have been under age 17 at the end of 2012.
- Relationship test. The child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, or stepsister. A child may also be a descendant of any of these individuals, including your grandchild, niece or nephew. You would always treat an adopted child as your own child. An adopted child includes a child lawfully placed with you for legal adoption.
- Support test. The child must not have provided more than half of their own support for the year.
- Dependent test. You must claim the child as a dependent on your federal tax return.
- Joint return test. The child cannot file a joint return for the year, unless the only reason they are filing is to claim a refund.
- Citizenship test. The child must be a U.S. citizen, U.S. national or U.S. resident alien.
- Residence test. In most cases, the child must have lived with you for more than half of 2012.
- Limitations. The Child Tax Credit is subject to income limitations, and may be reduced or eliminated depending on your filing status and income.
- Additional Child Tax Credit. If you qualify and get less than the full Child Tax Credit, you could receive a refund even if you owe no tax with the refundable Additional Child Tax Credit.
Considering a Tax Professional? For no obligation free consultation contact us today!
Amare Berhie, Senior Tax Accountant
612-282-3200 Toll Free866-936-0430
http://www.abataxaccounting.com
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