Introduction to Publication 972 and its Role in Calculating the Child Tax Credit
Publication 972 served as a vital resource for taxpayers seeking to claim the Child Tax Credit (CTC) on their tax returns during tax years prior to 2021. This IRS document provided essential guidance on determining eligibility and calculating the exact child tax credit amount based on a child’s status and the taxpayer’s income level.
The CTC is a popular federal tax benefit that can significantly lower a taxpayer’s taxable income for the year. Parents, foster parents, and guardians of qualifying children under 17 years old may be eligible to claim this credit using either Form 1040 or 1040NR. Understanding Publication 972: Child Tax Credit
To qualify for the CTC, a child must meet specific requirements outlined in the document: they must be under 17 by the end of the tax year, claimed as a dependent on the federal tax return, a U.S. citizen, resident alien, or national, lived with the taxpayer for more than half of the tax year, and not have provided over half of their financial support themselves.
Publication 972 also offered instructions on calculating the maximum child tax credit amount available for each qualifying child during the tax year. For example, in tax year 2020, taxpayers could claim up to a $2,000 credit per qualifying child. This amount had been in effect since 2018 when it was increased from a maximum of $1,000 per child.
In addition to the child tax credit, Publication 972 explained how families with an annual income below certain thresholds could potentially receive refunds for any unused credit through the Additional Child Tax Credit (ACTC). The ACTC was a refundable portion of the CTC that increased from $1,000 in 2016 to $1,400 in tax year 2020. This change allowed low-income families whose credits exceeded their tax liabilities to receive a refund for the difference, up to the maximum ACTC amount of $1,400.
However, as of tax year 2021, Publication 972 is no longer used to determine the child tax credit and Additional Child Tax Credit. Instead, these credits are calculated using Form 1040 and Schedule 8812.
It’s crucial for taxpayers to familiarize themselves with the changes in tax law regarding the child tax credit and related documents to ensure they file their taxes accurately and efficiently. Understanding the role and limitations of Publication 972 during the years it was applicable will help ensure that taxpayers have a solid foundation to build on when transitioning to the new Form 1040 Schedule 8812.
Stay tuned for the following sections in our comprehensive guide to IRS Publication 972: eligibility requirements, calculating the child tax credit using the worksheets provided in the document, and instructions on how to file Schedule 8812 with Form 1040 or 1040NR.
Eligibility Requirements for Claiming the Child Tax Credit Using Publication 972
In order to understand how the child tax credit works and whether you are eligible to claim it using IRS Publication 972, it’s vital to grasp the eligibility conditions a child must meet. These requirements ensure that only qualifying children or dependents can be claimed for the credit.
For tax years up until 2020, Publication 972 served as the primary resource for determining if a child qualified for the Child Tax Credit. To be considered a qualifying child or dependent under this document, a child must meet the following conditions:
1. Age: The child should be under 17 years old by the end of the tax year. This age limit applies to both biological and adopted children.
2. Dependency Status: The child must be claimed as a dependent on the taxpayer’s federal income tax return, ensuring that the person providing most of their financial support falls within that category.
3. Residency: The qualifying child or dependent must be either a U.S. citizen, resident alien, or national. For more comprehensive information regarding residency requirements, refer to Publication 519 (U.S. Tax Guide for Aliens) for further clarification.
4. Physical Presence: The child should have lived with the taxpayer for over half of the tax year. This requirement is in place to ensure that the family maintains a close relationship and that the child is primarily dependent on them.
5. Financial Support: The child or dependent cannot provide more than half of their financial support during the tax year. This condition ensures that only children who are genuinely reliant on the taxpayer’s financial resources can qualify for the credit.
In addition to these eligibility requirements, the Child Tax Credit was subject to income limits. These limitations varied depending on the taxpayers’ filing status. In 2020, the child tax credit phased out for single filers with an adjusted gross income (AGI) above $200,000 and for joint filers with an AGI above $400,000.
If you meet all the eligibility requirements, Publication 972 provides a worksheet that can be used to calculate your Child Tax Credit amount. The document also explains how to determine the credit amount in unusual cases and provides guidance on potentially receiving a refund through the Additional Child Tax Credit (ACTC). However, it’s essential to remember that Publication 972 is no longer in use for tax years 2021 and later. Instead, Form 1040 or 1040NR should be used, along with Schedule 8812, when filing for the Child Tax Credit and the refundable portion of it, the Additional Child Tax Credit (ACTC).
Calculating the Amount of the Child Tax Credit Using Publication 972
IRS Publication 972 provided crucial guidance for taxpayers in calculating the child tax credit amount for tax years 2020 and earlier. To determine your eligibility and the credit’s maximum value, you followed the instructions outlined in this comprehensive document. Here are the key steps to calculate the Child Tax Credit using Publication 972:
Step 1: Check Eligibility of Your Dependent(s)
To be eligible for the Child Tax Credit, a dependent must meet specific conditions:
* Under the age of 17 at year-end.
* Claimed as a dependent on your federal tax return.
* A U.S. citizen, resident alien, or national.
* Lived with you for more than half of the year.
Step 2: Calculate Adjusted Gross Income (AGI)
Determine your AGI by calculating your total income and subtracting specific deductions (as indicated in Form 1040 or Form 1040NR). Remember, there are upper-income limits for the credit eligibility. For tax years 2020, this limit was $200,000 for singles and $400,000 for married filing jointly.
Step 3: Determine the Amount of Child Tax Credit
Using the worksheets provided in Publication 972, calculate the amount of credit you can claim for each qualifying child or dependent based on your AGI. This will help determine if the credit is refundable or non-refundable.
Step 4: Refundable Portion of Child Tax Credit (ACTC)
If your calculated credit exceeds your tax liability, and your income falls below specific limits, you may be eligible for a refund using the Additional Child Tax Credit (ACTC). Publication 972 provides guidance on how to file Schedule 8812 to claim any refundable portion of the credit.
The IRS document also includes instructions for calculating child tax credits in unusual cases or for situations involving adoption expenses, as well as information about filing requirements for claiming the credit.
Overall, Publication 972 was a valuable resource for taxpayers to understand and utilize their Child Tax Credit benefits during tax years 2020 and earlier. By following its instructions carefully, you could determine your eligibility, calculate the amount of potential credits, and understand any refund opportunities.
Refunds, Additional Child Tax Credit (ACTC), and Filing Requirements
The Child Tax Credit (CTC) is a significant tax benefit for many parents, foster parents, and guardians of qualifying children or dependents. For tax years 2020 and earlier, IRS Publication 972: Child Tax Credit was the go-to resource to help you claim this credit. With tax year 2021 onwards, however, Form 1040 Schedule 8812 has replaced Publication 972 for calculating your child tax credit and credit for other dependents. In this section, we will explore how the IRS’s publication impacted refunds, eligibility requirements, and filing procedures.
Refundable Portion of the Child Tax Credit: Additional Child Tax Credit (ACTC)
The IRS’s Publication 972 was instrumental in determining the maximum refundable portion of the child tax credit for qualifying individuals with low income. The Additional Child Tax Credit (ACTC) is the refundable part of this credit, which increased from $1,000 to $1,400 as a result of the changes made in 2017. To be eligible for this additional amount, filers should have an annual income of less than $2,500 ($5,000 if married filing jointly). This means that families whose tax credits exceeded their liabilities could request refunds up to $1,400 per child.
Filing for Refunds Using Schedule 8812
To claim the refundable portion of your Child Tax Credit using Publication 972, you would follow specific instructions provided in the document. With the introduction of Form 1040 Schedule 8812, this process has been simplified and streamlined. To request a refund, filers are required to complete Schedule 8812 along with their Form 1040 or 1040NR. This form covers both the regular Child Tax Credit and the Additional Child Tax Credit (ACTC).
Eligibility for Refunds
It’s crucial to note that the eligibility requirements for receiving a refund using Schedule 8812 are not identical to those for claiming the credit itself. Income limits still apply, although they differ from those found in Publication 972. To be eligible for a refund based on your Child Tax Credit or Additional Child Tax Credit, you must have an adjusted gross income (AGI) of less than $400,000 if married filing jointly or $200,000 in all other cases.
Supporting Documents and Procedures
To file for a refund using Schedule 8812, you will need to provide supporting documents such as the Social Security number or individual taxpayer identification number (ITIN) of each qualifying child or dependent, as well as your own SSN or ITIN. The instructions provided in Form 1040 and Form 1040-SR will guide you through the process of properly completing Schedule 8812 to claim any refundable credits.
Conclusion
Publication 972 played an essential role in guiding taxpayers on how to determine their child tax credit eligibility, calculate their credits, and request refunds for the refundable portion of the Additional Child Tax Credit (ACTC). With the introduction of Form 1040 Schedule 8812, these processes have been streamlined, simplifying the experience for those claiming the Child Tax Credit. In the following sections, we will delve deeper into the eligibility requirements and calculation procedures for using Publication 972 with Forms 1040 and 1040NR.
Important Changes to Publication 972 from Tax Year 2018 Onwards
Since its inception, the Child Tax Credit has undergone significant modifications. Beginning in tax year 2018, Publication 972 became an essential resource for calculating this popular tax credit. However, as we progressed to tax years 2021 and beyond, the IRS introduced a new method for determining the Child Tax Credit—Form 1040 Schedule 8812.
Let’s examine some of the most critical changes made to the Child Tax Credit since 2018:
Eligibility Requirements
– Income Limits: From tax year 2018, the child tax credit became subject to phaseouts based on a taxpayer’s income level. The amount of the credit began to reduce for single filers with an adjusted gross income (AGI) over $200,000 and married couples filing jointly with an AGI above $400,000.
– Age Limit: The eligibility age for children changed from 16 to under 17 years old.
Credit Amounts
– Base Credit Increase: In tax year 2018, the maximum credit amount increased significantly from $1,000 to $2,000 per qualifying child. This change was made permanent for subsequent years.
– Additional Child Tax Credit (ACTC): The ACTC—which is a refundable portion of the credit—also saw an increase, rising from $1,000 to $1,400 for tax year 2018. This meant that low-income families with unused credits could potentially receive a larger refund.
Refunds and Filing Requirements
– Schedule 8812: In tax years 2021 and onwards, the IRS mandated the use of Form 1040 Schedule 8812 to file for any Child Tax Credit refunds or credits exceeding tax liability. This replaced the need for Publication 972 as a resource for determining the credit amount.
– Income Limits for Refundable Credits: The IRS introduced new income limits for taxpayers who could claim the ACTC. In tax year 2021, eligible filers needed to have an AGI below $450,000 (single filers) or $500,000 (married filing jointly) to qualify.
These modifications not only changed how the Child Tax Credit was calculated but also impacted how taxpayers filed their returns and claimed any potential refunds. Understanding Publication 972’s role in these years is crucial for anyone looking to accurately claim the credit before its replacement by Form 1040 Schedule 8812.
Special Considerations for Filing Publication 972 with Low Income and High-Income Levels
The Child Tax Credit is a valuable tax benefit that can significantly reduce the overall tax burden for many families. However, it’s essential to understand that this credit comes with certain income eligibility requirements and limitations. For tax years prior to 2021, IRS Publication 972 was used to determine both eligibility and the maximum amount of the Child Tax Credit a family could claim. Here, we explore what you need to know about filing Publication 972 with low income and high-income levels.
Eligibility Requirements for Low-Income Families
The Child Tax Credit was designed to help families with financial needs by providing monetary relief through a tax credit. In the case of low-income families, it is crucial to understand that eligibility requirements may vary depending on specific circumstances. IRS Publication 972 outlined that for a child to be considered a qualifying child or dependent, they must meet the following conditions:
1. Under age 17 by the end of the tax year.
2. Claimed as a dependent on your federal tax return.
3. A U.S. citizen, resident alien, or national, with residency requirements detailed in IRS Publication 519.
4. Lived with you for more than half of the tax year.
5. Did not provide more than half of their own financial support.
However, it is essential to note that there are also income limits that apply to families seeking this credit. In tax years prior to 2021, Publication 972 indicated that a taxpayer’s adjusted gross income (AGI) should be below $200,000 for singles and head of households or $400,000 if married filing jointly to qualify.
Additional Child Tax Credit Refunds
A significant aspect of the Child Tax Credit is the refundable Additional Child Tax Credit (ACTC). This provision allowed families with an annual income below a certain threshold to receive a refund for any unused credit amount. According to Publication 972, families with an AGI of more than $2,500 could file Schedule 8812 to claim their refunds.
Taxpayers with low incomes may also be eligible for a larger ACTC refund depending on their income level and the number of qualifying children they have. In the case of tax years prior to 2021, the maximum refundable amount was $1,400 per child for families with an AGI below $43,000 ($86,000 if married filing jointly).
Special Considerations for High-Income Families
High-income taxpayers may also face certain limitations when it comes to claiming the Child Tax Credit. Publication 972 stated that in tax years prior to 2021, eligibility for this credit was phased out for individuals with an AGI of $200,000 and married couples filing jointly with an AGI of $400,000. This phase-out threshold means that the amount of available credit gradually decreases as income increases towards the limit.
For example, a single filer with an AGI above $150,000 but below $200,000 would only be able to claim a reduced child tax credit amount compared to someone with an AGI of $149,999 or lower. Similarly, married couples filing jointly with an AGI between $160,000 and $200,000 could claim a reduced credit compared to a couple with an AGI below $160,000.
In conclusion, Publication 972 played a significant role in understanding the Child Tax Credit for tax years prior to 2021. It provided valuable information on eligibility requirements, credit amounts, and refunds for families with low and high-income levels. While this document is no longer used from 2021 onwards, it remains an essential resource for those who need to file taxes based on earlier tax years.
Instructions for Filing Publication 972 with Form 1040 or 1040NR
If you are aiming to claim the Child Tax Credit (CTC) for tax years prior to 2021, it’s crucial to understand how Publication 972 comes into play. This IRS document served as a valuable resource to calculate your CTC, offering step-by-step procedures and essential worksheets to determine your eligibility and credit amount.
First, ensure that you meet the basic conditions: the child or dependent must be under age 17 by the year’s end, claimed as a dependent on your federal tax return, and either a U.S. citizen, resident alien, or national. Also, consider the child lived with you for over half the tax year and did not provide more than half of their support themselves.
Following these guidelines, use Publication 972 to help calculate your maximum credit amount. In tax years 2020 and prior, the allowable credit was up to $2,000 per qualifying child. However, bear in mind that high-income earners with an AGI exceeding $200,000 or $400,000 if married filing jointly may face limitations on their eligibility for this credit.
To file Publication 972 with your tax forms (Form 1040 or Form 1040NR), complete the following steps:
1. Gather all necessary documents, including W-2s, Form 1095-T for education credits, and any other relevant documentation related to dependents.
2. Carefully review Publication 972, particularly Worksheet 1-3, which focuses on determining eligibility and calculating the child tax credit.
3. Fill out the worksheets with accurate information regarding income, your dependents, and any applicable adjustments.
4. Transfer the results to Form 1040 or 1040NR, depending on which form you are using.
5. Once completed, attach Publication 972 to your tax return as proof that you followed the IRS guidelines for calculating your CTC.
When filing for a refund of any unused credit from tax years prior to 2021, you may need to complete Schedule 8812. This form should only be used when your CTC exceeds your tax liability, and your annual income is over $2,500. Remember, the IRS does not allow refunds for unused child tax credits from tax years 2021 onward.
By following these instructions carefully and utilizing Publication 972, you can maximize the benefits of the Child Tax Credit and ensure a successful filing process.
Recap of Key Takeaways from IRS Publication 972: Child Tax Credit
In the world of tax credits, one of the most valuable benefits available to families is the Child Tax Credit (CTC). This credit can significantly reduce a taxpayer’s tax liability and make their overall financial situation more manageable. In previous tax years, including those up until 2020, taxpayers would use IRS Publication 972: Child Tax Credit to understand the eligibility criteria and calculation process for this credit. However, with the introduction of Schedule 8812 in Form 1040 from tax year 2021 onwards, the role of Publication 972 has changed.
First, let’s explore what the Child Tax Credit is and how it functioned with Publication 972. Most parents, foster parents, or guardians could claim a child tax credit for each qualifying child under the age of 17 by the end of the tax year. This dependent had to meet specific eligibility conditions: being claimed as a dependent on the taxpayer’s federal tax return, being a U.S. citizen, resident alien, or national (refer to Publication 519 for residency requirements), living with the taxpayer for more than half of the tax year, and not providing over half their financial support.
The Child Tax Credit offered substantial relief as it allowed families to lower their taxable income by a considerable amount. The maximum credit that could be claimed in the 2020 tax year was $2,000 per qualifying child. This limit had been established in 2018 when the IRS doubled the previous $1,000 credit from 2017.
Publication 972 provided a worksheet to help taxpayers calculate their child credits for unusual cases. Moreover, it explained how taxpayers could potentially receive a refund for any unused credit via the Additional Child Tax Credit (ACTC). From 2018 to 2020, eligible filers could request refunds of up to $1,400 if they had an annual income above $2,500. To claim such a refund, taxpayers needed to complete Schedule 8812.
However, it is essential to be aware that the Child Tax Credit comes with certain limitations. For instance, eligibility for this credit could be impacted by high-income levels. In tax year 2020, the income threshold was set at $400,000 for married filing jointly and $200,000 for all other filers.
In summary, Publication 972: Child Tax Credit played a significant role in helping taxpayers understand the eligibility requirements and calculation procedures for the Child Tax Credit from tax years 2020 and earlier. Now that Form 1040 Schedule 8812 has taken over this responsibility, it is crucial to familiarize yourself with the new process for determining child tax credits in subsequent tax years.
Comparison Between Publication 972 and the New Form 1040 Schedule 8812 for Child Tax Credit
The Internal Revenue Service (IRS) has issued significant changes to how the child tax credit is calculated, effective from tax year 2021. In previous years, including 2020, Publication 972 served as a crucial reference document for determining the eligibility and amount of the child tax credit for qualifying children. However, with the introduction of Form 1040 Schedule 8812, Publication 972 has been replaced as the primary resource for calculating the credit. In this section, we will discuss the differences between these two forms and how they impact the child tax credit calculation process.
Publication 972: An Overview
Publication 972 was a comprehensive document published by the Internal Revenue Service (IRS) that provided extensive guidance for taxpayers in calculating their child tax credits. It covered topics such as eligibility requirements, worksheets for calculating credit amounts, and instructions for filing refund claims. The form offered detailed explanations on how to determine the maximum amount of child tax credits a filer could claim based on their specific circumstances.
Form 1040 Schedule 8812: The New Resource
For tax years 2021 and beyond, taxpayers must instead refer to Form 1040 Schedule 8812 to calculate their child tax credits. This document essentially serves the same purpose as Publication 972 but is now integrated directly into the tax forms themselves. The form includes instructions for calculating both regular child tax credit and additional child tax credit (ACTC) amounts, along with detailed instructions on how to claim refunds if applicable.
Key Changes between Publication 972 and Form 1040 Schedule 8812
The primary difference between these two forms lies in their format and integration within the overall filing process. Publication 972 was a standalone document that taxpayers had to consult separately when calculating their child tax credit. In contrast, Form 1040 Schedule 8812 is integrated directly into the Form 1040 tax return, making it more convenient for filers to access and use.
Another difference concerns the availability of certain worksheets and instructions provided in Publication 972. While some instructions have been transferred to the new form, others are no longer required due to the simplification of the calculation process. Taxpayers may find it helpful to keep a copy of Publication 972 for reference when dealing with more complex situations involving multiple children or dependents, as the document offers extensive explanations that can be useful in such cases.
Adjusting to the New Process
As taxpayers transition from using Publication 972 to Form 1040 Schedule 8812 for calculating their child tax credits, it is essential to familiarize yourself with the new form’s layout and instructions. While many aspects of the calculation process remain similar, there are subtle changes that may impact the way filers approach their tax returns. By carefully reviewing both forms, taxpayers can ensure a smooth transition and a successful filing process.
In conclusion, Publication 972 and Form 1040 Schedule 8812 serve similar purposes but differ in format and accessibility. Understanding these differences is crucial for ensuring accurate calculation of the child tax credit for tax years 2021 and beyond. With proper preparation and a thorough understanding of both forms, taxpayers can effectively navigate the new filing process and claim their rightful credits.
Understanding Publication 972: Child Tax Credit (Continued)
The child tax credit was one of the most popular tax benefits for families with children under the age of 17. To qualify for this credit, a child must meet specific requirements set out by the IRS. Publication 972 provided comprehensive instructions on these eligibility conditions. Here is a brief summary:
A qualifying child must be:
• Under age 17 at the end of the tax year
• Claimed as a dependent on the taxpayer’s federal tax return
• A U.S. citizen, resident alien, or national (IRS Publication 519 contains additional information on residency requirements)
• Have lived with the taxpayer for more than half of the tax year
• Not have provided more than half of their own financial support
Publication 972 also offered valuable insights into determining the child tax credit amount. In the case of tax year 2020, eligible filers could claim up to $2,000 for each qualifying child, making it an essential resource for families aiming to maximize their tax savings.
To help taxpayers understand the intricacies of calculating and claiming the child tax credit using Publication 972, the document provided a series of worksheets designed to simplify the process. These worksheets were particularly helpful in determining the amount of additional child tax credits (ACTC) that could be claimed by low-income families.
When calculating the child tax credit with Publication 972, it is also essential to consider income limitations. The IRS sets specific income thresholds for eligibility, which vary depending on your filing status and whether you are claiming a refundable or non-refundable credit. Income levels above these limits could impact your ability to claim the full amount of the child tax credit and ACTC.
Publication 972 offered detailed guidance on how to calculate the maximum credits available based on your income, number of children, and filing status. For many families, it was an essential resource for maximizing their tax savings and ensuring a successful filing process. However, with the introduction of Form 1040 Schedule 8812 for tax years 2021 and beyond, Publication 972 is no longer the primary document for calculating child tax credits.
To illustrate how Publication 972 was used in practice, let’s explore a few examples of common situations taxpayers might encounter when calculating their child tax credit using this document.
Example 1: A Married Filing Jointly Couple with Three Children
John and Mary are married and have three children: Jack (age 8), Sarah (age 5), and Tom (age 2). They had an adjusted gross income (AGI) of $300,000 in the tax year 2020. Using Publication 972, they can determine their child tax credit amount as follows:
1. Calculate the total child tax credit for all children:
Total Child Tax Credit = ($2,000 × Number of Children)
Total Child Tax Credit = ($2,000 × 3)
Total Child Tax Credit = $6,000
2. Determine their income limit for non-refundable credits:
Non-Refundable Income Limit = AGI + ($15,000 × Number of Children)
Non-Refundable Income Limit = $300,000 + ($15,000 × 3)
Non-Refundable Income Limit = $426,500
Since their AGI is below this limit, they can claim the full $6,000 child tax credit.
Example 2: A Single Parent with One Child and Low Income
Jane is a single parent with one child, Emily (age 7), who lived with her for the entire year. Her AGI for tax year 2020 was $18,000. Using Publication 972, she can calculate her child tax credit as follows:
1. Calculate the total child tax credit for her child:
Total Child Tax Credit = $2,000
2. Determine her income limit for refundable credits:
Refundable Income Limit = AGI + Earned Income ($3,650)
Refundable Income Limit = $18,000 + $3,650
Refundable Income Limit = $21,650
Since her income is below the refundable income limit of $43,050 (as per Publication 972), she can claim the full $2,000 child tax credit and receive a refund for any unused portion.
In conclusion, Publication 972 played a vital role in helping taxpayers calculate their child tax credits for tax years prior to 2021. Its comprehensive instructions on eligibility requirements, worksheets, and income limits provided valuable guidance for families seeking to maximize their tax savings. However, with the introduction of Form 1040 Schedule 8812, Publication 972 is no longer the primary resource for calculating child tax credits. Nonetheless, its detailed explanations and insights remain relevant for taxpayers dealing with complex situations or multiple children/dependents.
As you navigate this transition from Publication 972 to Form 1040 Schedule 8812, it is essential to familiarize yourself with the new form’s layout and instructions. By carefully reviewing both forms, taxpayers can ensure a smooth filing process and successfully claim their child tax credits for tax years 2021 and beyond.
FAQ: Publication 972 Child Tax Credit
What is IRS Publication 972, and how was it used for the Child Tax Credit?
Publication 972, issued by the Internal Revenue Service (IRS), provided guidance on determining the exact amount of the child tax credit that eligible taxpayers could claim. This document, used from tax years 2020 and earlier, included instructions for calculating the credit, eligibility requirements for children or dependents, and refund procedures.
What are the eligibility conditions for a child to be claimed as a qualifying child using Publication 972?
To qualify, a child must meet several conditions:
– Be under age 17 by the end of the tax year
– Be claimed as a dependent on the filer’s federal tax return
– Be a U.S. citizen, resident alien, or national
– Live with the taxpayer for more than half of the tax year
– Not provide over half their financial support
What is the maximum amount that could be claimed in child tax credit using Publication 972?
For tax years 2020 and earlier, the maximum amount of the child tax credit claimable was $2,000 per qualifying child. However, low-income families could receive a refund for any excess credit through the Additional Child Tax Credit (ACTC), up to $1,400 per child.
What happens if a filer’s income exceeds specific limits?
The child tax credit is not available to taxpayers with an adjusted gross income (AGI) above certain thresholds:
– $200,000 for single filers or head of household status
– $400,000 for married filing jointly
How do I claim the child tax credit on Form 1040?
To claim the child tax credit on Form 1040, follow the instructions provided in Publication 972. This includes completing Schedule 8812 and determining your qualifying children or dependents’ eligibility status based on the worksheets provided.
Can I request a refund of any unused portion of my child tax credit?
Yes, if a filer has an annual income below $2,500 (or $5,000 for married filing jointly), they can receive a refund through the Additional Child Tax Credit (ACTC). To make a claim for a refund, complete Schedule 8812.
Why is Publication 972 no longer used from tax years 2021 and beyond?
The Internal Revenue Service (IRS) replaced Publication 972 with Form 1040 Schedule 8812 for calculating the child tax credit and the Additional Child Tax Credit starting in tax year 2021.