Additional Child Tax Credit

Loading the player...

What is the 'Additional Child Tax Credit'

The additional child tax credit is a refundable credit that can be claimed by taxpayers who are ineligible to claim the full non-refundable child tax credit, because it exceeds their total tax liability. The additional child tax credit was created to reimburse taxpayers for the non-refundable portion of their child tax credit.

The additional child tax credit is available to families with three or more qualified children.

BREAKING DOWN 'Additional Child Tax Credit'

The additional child tax credit is calculated by adding 15% of the taxpayer's taxable earned income to any tax-free combat pay. The total amount that is in excess of $11,750 (subject to annual adjustments for inflation) is refundable.

Even taxpayers with income below this threshold are eligible if they have at least three qualifying dependents and have paid Social Security tax in excess of the amount of their earned-income credit for the year. This credit is claimed on form 8812 and is also subject to the same phaseout limitations as the child tax credit.

RELATED TERMS
  1. Child Tax Credit

    A credit given to taxpayers for each dependent child that is ...
  2. IRS Publication 972: Child Tax ...

    A document published by the Internal Revenue Service (IRS) that ...
  3. Dependent Care Credit

    A nonrefundable tax credit offered to taxpayers who pay out-of-pocket ...
  4. Tax Credit

    An amount of money that a taxpayer is able to subtract from the ...
  5. Dependent

    An individual whom a taxpayer can claim for credits and/or exemptions. ...
  6. Adoption Credit

    A federal tax credit that may be claimed by federal taxpayers ...
Related Articles
  1. Personal Finance

    Give Your Taxes Some Credit

    A few tax credits can greatly increase the amount of money you get back on your return.
  2. Personal Finance

    How To Claim A Dependent On Your Tax Return

    If you are a caregiver, get to know the rules for claiming a dependent before filing your taxes.
  3. Personal Finance

    5 Tax Credits You Shouldn't Miss

    If you're not taking advantage of these deductions, you could be missing out on tax savings.
  4. Personal Finance

    How To Get The Most Money Back On Your Tax Return

    Many people pay more taxes than they have to simply because they don’t know better. Here are a few suggestions for getting the most out of your tax return.
  5. Personal Finance

    What's IRS Form 1040 For?

    Most U.S. taxpayers will be familiar with the 1040. By the end of filling it out, you'll know how much tax you owe, or what your refund is.
  6. Personal Finance

    A "Kiddie Tax" Overview For Parents

    Understanding how children are taxed is very important when it comes to saving for their college education.
  7. Personal Finance

    Tax Credits That Can Get You a Refund

    Here are a few of the credits that may result in a refund check, even if you owe no taxes this year.
  8. Personal Finance

    How to File Your Child's First Income Tax Return

    Use this quick parental guide to help your child learn the tax filing process and establish good habits.
  9. Personal Finance

    This Explains $0 Federal Income Tax for Millions

    Understand how the earned income tax credit works and whether it applies to you.
  10. Personal Finance

    Top Tax Refunds For Recent Grads

    Don't miss out on these tax credits if you have recently graduated.
RELATED FAQS
  1. What is the difference between a write-off and a deduction?

    Understand the differences between a tax write-off and a tax deduction. Learn how each one works to reduce income taxes and ... Read Answer >>
  2. How can I use a child tax credit?

    You may be able to reduce the amount of taxes you owe by up to $4,000, by claiming the child tax credit of up to $1,000 for ... Read Answer >>
  3. How much does a dependent reduce your taxes?

    Learn the qualifications for claiming a dependent on your income taxes and the amount by which a dependent reduces your tax ... Read Answer >>
  4. How do I sign up for the saver's tax credit?

    The saver's tax credit is a non-refundable tax credit available to eligible taxpayers in the U.S. who make contributions ... Read Answer >>
  5. Can my child have an IRA/Roth IRA?

    Explore the possibilities for establishing a traditional or Roth IRA for a minor child, and learn the necessary requirements, ... Read Answer >>
  6. Will jointly filing taxes have the effect of joining a couple's credit?

    The only thing that "joins" the credit of a married couple is the ownership of joint accounts. In other words, if there is ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center