What Is Publication 972: Child Tax Credit?

Publication 972 is a document published by the Internal Revenue Service (IRS) that provides guidance on determining the exact amount of the child tax credit that taxpayers can claim. It includes an update on any changes in the tax credit for the year. There also is a worksheet to help taxpayers calculate their child credits in certain unusual cases.

The publication includes instructions for determining the child tax credit to claim on Form 1040, and the amount of earned income to enter on Schedule 8812: Additional Child Tax Credit.

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Tax Deductions Vs. Tax Credits

Key Takeaways

  • Publication 972 explains one of America's most popular tax credits, the Child Tax Credit.
  • For 2019, the maximum credit per child is $2,000.
  • There are upper income limits on eligibility for the credit.

Who Can Use Publication 972: Child Tax Credit

Most parents, foster parents, and guardians of children under age 17 can use the child tax credit to lower their taxable income for the year.

The child tax credit must be claimed using Form 1040 or 1040NR.

The maximum amount that can be claimed for a qualifying child is $2,000 for tax year 2019. That number was doubled in 2018.

With changes to the law in 2017, the refundable portion of the Child Tax Credit, known as the Additional Child Tax Credit (ACTC), has increased to $1,400 from $1,000 previously. That is, low-income taxpayers whose credits exceed their tax liabilities can get refunded up to $1,400. This applies to the 2018–2025 tax years.

Eligibility

IRS Publication 972 can be used to determine if a child is eligible, and how much credit a taxpayer can take.

According to IRS Publication 972, a qualifying child or dependent must:

  • Be under the age of 17 by the end of the tax year;
  • Be claimed as a dependent on the taxpayer's federal tax return;
  • Be a U.S. citizen, resident alien, or national - more information on residency requirements can be found in IRS Publication 519;
  • Have lived with the taxpayer for more than half of the tax year; and
  • Not have provided more than half of his or her own financial support.

IRS Publication 972 provides a child tax credit worksheet that can be used to determine the amount of child tax credit that can be claimed.

The child tax credit has income limits. For married couples filing jointly, eligibility is reduced at $400,000 and eliminated at $440,000.

The Refundable Portion

The Additional Child Tax Credit (ACTC) is the refundable portion of the child tax credit.

Families may qualify for the ACTC if they already qualify for the non-refundable child tax credit. The ACTC is ideal for low-income parents who owe less than the Child Tax Credit they can claim and thus are eligible to get a refund for the surplus.

The Internal Revenue Service (IRS) allows families with annual income of more than $2,500 to claim a refund using the Additional Child Tax Credit.

Income Requirements

The child tax credit is not available to taxpayers at certain high income levels. For 2019, the tax credit is reduced for single parents with an adjusted gross income of $200,000. For married couples filing jointly, the credit is reduced at $400,000.

Download Publication 972 Here

For the instructions on the child tax credit, download Publication 972: Child Tax Credit.

To claim the Additional Child Tax Credit, filers must complete Schedule 8812.