THE Bush-Era Tax Cuts was set to expire on December 31, 2011 and one of those that would have been greatly impacted is the Child Tax Credit (CTC), one of the most popular tax credits for families and children.
Had the Obama administration not extended the Bush-Era Tax cuts for another year, the CTC would have reverted back to its original amount of a maximum of $500 per child prior to the program implementation ten years ago. But with the extension, families meeting the eligibility requirement can still enjoy the benefit of $1,000 per child for their 2011 tax returns.
Eligibility requirements to qualify remain the same. You have to meet all of the following criteria:
– the child is your son, daughter, stepchild, foster child, adopted child, brother or sister; or a descendant of any of them (for example your grandchild, nephew, or niece; for any dependent other than your child, the IRS might ask for proof of custodianship).
– the child was under age 17 at the end 2011 (that means the child should be 16 years old or below on December 31, 2011)
– the child lived with you for more than half of the year (at least 183 days or 6 months + 1 day)
– the child did not provide more than half of his or her own financial support (if child has own source of income)
– the child is a citizen or resident alien of the United States;
– the child was claimed as a dependent on your tax return (there are additional guidelines on claiming a dependent);
– the child does not file a joint tax return (with his spouse; though the child could file his individual tax return, if applicable, as long as you have provided more than half of his support and all the other eligibility criteria are met).
However, in a progressive tax system that believes in creating “equalization” to its taxpayers, the credit is reduced or phased out if your adjusted gross income (total of all incomes taxable less specific distributions) reaches the following levels:
– $55,000 for married couples filing separately,
– $75,000 for single, head of household, and qualifying widow(er) filers, and
– $110,000 for married couples filing jointly
– The $1,000 per child credit is set to expire in 2012, unless new tax regulations affecting it is implemented. While the great bipartisan divide is being discussed in Congress whether to let this expire or not, families and taxpayers have one year left to take advantage of a greater bottom line for their pockets.
The credit is added on in the calculation of your income tax return.
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Evangeline is a California registered tax preparer, a legal document assistant for the general public, and a freelance paralegal offering assistance to various attorneys. She can be reached at her office at 2451 Colorado Blvd. #2, Eagle Rock, CA 90041 or at her marketing location inside the Eagle Rock Plaza. Her phone number is (323) 550-1869 or you can check her website at: www.evangelinegiron.net. She is a member of the court-endorsed California Association of Legal Document Assistant (CALDA) and an Associate Member (Non-attorney) of the LA County Bar Association (LACBA).
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Note: Evangeline is not an attorney nor does she provide legal advice. She is a bonded and registered Legal Document Assistant and prepares legal documents per the specific direction of clients.
