Lesson 6

Child Tax Credit

Objectives

• Calculate the Child Tax Credit using the child tax credit worksheet

• Calculate the Additional Child Tax Credit by using Form 8812, Additional Child Tax Credit

Intake/Interview Process

Form 13614 – Intake and Interview Sheet – Credits Section

Qualifying Child

• Relationship• Age• Citizenship• Support• Residency

Child Tax Credit

• Exception to “Time-Lived-With-You” Requirement– Child born/died in 2006– Kidnapped Child– Special Rules for Children of

Divorced or Separated Parents.

Child Tax Credit

• Limits on credit• Modified AGI

Check Withholding

• The child tax credit decreases the tax liability dollar for dollar, but not below zero.

• The taxpayer may want to adjust his or her withholding, if he or she is having too much tax withheld.

Additional Child Tax Credit

• Information about the Additional Child Tax Credit.

• Use Form 8812, Additional Child Tax Credit, to compute the credit.

Additional Child Tax Credit

• Before completing the form, gather the following information:• Earned Income Credit Amount• Taxable earned income• Any adjustment to income for self-

employment tax• If the taxpayer has three or more

children, total Social Security and Medicare taxes withheld (Form W-2, boxes 4 and 6).

Quality Review (QR)

Form 8158 – Quality Review Checklist

Adjustments, Deductions, and Credits Section

Lesson Summary

• Interview Tips•Exercise 1•Questions