Child Tax Credit is an important tax credit depending upon your income. Parents, guardians and other taxpayers who are eligible to claim a child as a dependent on their tax return may also be eligible for a federal tax credit of up to $1,000 per child. The child tax credit is one of several tax-related benefits for families and children.

1. What You Must Know About Child Tax Credits
Child Tax Credit is an important tax credit depending upon your income. Parents, guardians and other
taxpayers who are eligible to claim a child as a dependent on their tax return may also be eligible for
a federal tax credit of up to $1,000 per child. The child tax credit is one of several tax-related benefits
for families and children.
The Child Tax Credit can save you money at tax time if you have a child under the age of 17. Here’s
what you must know.
Amount.
The non-refundable Child Tax Credit may help reduce your federal income tax by up to $1,000 for
each qualifying child you claim on your return.
Qualifications.
For this credit, a qualifying child must pass seven tests:
● Age test.
The child must have been under age 17 at the end of 2012.
● Relationship test.
The relationship test is the most crucial. The child must be your son, daughter, stepchild,
foster child, brother, sister, stepbrother, or stepsister. Or may be a descendant of any of
these individuals, including your grandchild, niece or nephew. An adopted child includes
a child lawfully placed with you for legal adoption.

2. ● Support test.
The child must not have provided more than half of their own support for the year.
● Dependent test.
It is essential for the child to be claimed as a dependent on your federal tax return.
● Joint return test.
The child cannot file a joint return for the year, unless the only reason they are filing is to
claim a refund.
● Citizenship test.
The child must be a U.S. citizen, U.S. national or U.S. resident alien.
● Residence test.
It is also necessary for the child to have lived with you for more than half of 2012.
Limitations.
Depending on your filing status and income, the Child Tax Credit is subject to income
limitations, and may be reduced or eliminated.
Additional Child Tax Credit.
If you qualify and get less than the full Child Tax Credit, you could receive a refund even if
you owe no tax to the refundable Additional Child Tax Credit.

3. Schedule 8812.
If you qualify to claim the Child Tax Credit makes sure to check whether you must complete
and attach the new Schedule 8812, Child Tax Credit, with your return. If you qualify to claim
the Additional Child Tax Credit, you must complete and attach Schedule 8812.
Tax credits can be most effective with efficient tax planning. Particularly relevant to families, the
child and dependent care credit and the adoption credit are taken before the child tax credit.
Utilizing those credits can help reduce a person's federal tax liability and correspondingly could
increase the refundable portion of the child tax credit. With a tax expert you could also get assistance
in OVPD, FBAR, etc
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