Child Tax Credit and Additional Child Tax Credit 2015

Here’s what you need to know about the CTC, Child Tax Credit, and the refundable portion, the ACTC, Additional Child Tax Credit in 2015.  The child tax credit (as) is a non-refundable credit of up to $ 1,000 per child and additional child tax credit (as) is a refundable credit. If the amount of the taxpayer’s tax is less than the amount of the credit, the taxpayer can claim the additional child tax credit (as). To qualify for the additional child tax credit (as), Puerto Rico taxpayers must pay Social Security taxes and Medicare and have three or more children.

 

Additional Child Tax Credit in 2016

A taxpayer with income tax exempt under IRC 933 may qualify for the additional child tax credit (as) with three or more children. An employee of the United States or any federal agency in Puerto Rico may qualify for the child tax credit (as) and additional child tax credit (as). The 1040PR form is used to residents of Puerto Rico who have tax withheld Social Security and Medicare. They can file a federal tax return only to claim the additional child tax credit (as). The Form 1040 and Form 8812 is used by employees of the United States or any agency thereof to claim the additional child tax credit (as). Know that the Child Tax Credit is up to $1,000 per childup to $3,000 is refundable as ACTC

 

Qualifying Child for Child Tax Credit

  • Know who is a qualifying child in 2015. The child must:
    • Be under 17 at the end of the tax year
    • Meet the relationship and residency tests for uniform definition of a qualifying child, seeUnderstanding What is a Qualifying Child
    • Not provide more than half of his or her own support for the tax year
    • Have lived with you for more than half of the tax year (see Publication 972, Child Tax Credit, for exceptions for birth or death during the year, temporary absences, kidnapped or missing or children of divorced or separated parents)
    • Be claimed as a dependent on your return
    • Not file a joint return for the year (or filed the joint return only to claim a refund)
    • Be U.S. citizen, U.S. National or a U.S. resident alien (see Publication 519, U.S. Tax Guide for Aliens, for more information)
  • Know the limits on the credit in 2015
    • One can’t take the part of the CTC left after it reduces your tax to zero unless you qualify for the ACTC
    • The CTC is reduced if ones MAGI, modified adjusted gross income is above the amount listed below by filing status:
      • Married filing jointly – $110,000
      • Single, head of household or qualifying widow or widower–$75,000
      • Married filing separately – $55,000

 

Earned Income Tax Credit and Additional Child Tax Credit

  • Many people who qualify for the Earned Income Tax Credit also qualify for CTC and ACTC but know the important differences
    • For CTC, the qualifying child must be under age 17; the age limits for EITC are higher and there is no age limit for a child who is totally and permanently disabled
    • For EITC, the child must have a Social Security that is valid for employment but a child with an ITIN may qualify for CTC but must meet the substantial presence test, Be admitted for lawful permanent residence or make a first year election (see Instructions for Schedule 8812 for more information)