The Additional Child Tax Credit

Chris Bibey
by Chris Bibey

 

The Additional Child Tax Credit is a refundable tax credit that many people qualify to take advantage of. This credit is for taxpayers who have a qualifying child, but did not receive the full amount from the regular Child Tax Credit (worth up to $1,000 for each qualifying child). Since the Additional Child Tax Credit is refundable, you may also be able to get a refund ― even if you don’t have any tax liability.

In order to be eligible for the Additional Child Tax Credit, you must also qualify for the regular Child Tax Credit. If you are familiar with the requirements for the Child Tax Credit, you will be in much better position to take advantage of the additional credit because the rules are basically the same.

When the amount of your regular Child Tax Credit is limited because of your tax liability, the Additional Child Tax Credit comes into play. You may be able to claim the Additional Child Tax Credit if your adjusted gross income (AGI) is below the following levels:

  • Single or Head of Household ― AGI of $75,000
  • Married Filing Jointly ― AGI of $110,000
  • Married Filing Separately ― AGI of $55,000

The amount of the Additional Child Tax Credit is equal the unallowed portion of the Child Tax Credit, or 15% of your income that exceeds $3,000, whichever is less.

If you earned less than $3,000 and you have at least 3 qualifying children, you may be able to claim the Additional Child Tax Credit up to the amount you paid in Social Security taxes that year.

If you think you qualify for the Additional Child Tax Credit, you will need to fill-out and submit Form 8812 (Additional Child Tax Credit). The purpose of this form is to help you determine how much you can receive from this tax credit.

Before you fill-out Form 8812, however, you must first complete the regular Child Tax Credit Worksheet. (Remember, you will not qualify for the Additional Child Tax Credit if you don’t qualify for the Child Tax Credit.)

The Child Tax Credit is more common because fewer people qualify for the Additional Child Tax Credit. If you have children, it is very important to be aware of your tax situation and understand the tax credits (and tax deductions) that are available.  Staying informed will help you take advantage of the various tax benefits, such as the Additional Child Tax Credit, and reduce your tax liability.