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Your children may be worth more than you realize.
Depending on your income and if you have at least one qualifying child - you may be able to take the Child Tax Credit of up to $500 for each qualifying child on your 2000 federal income tax return. This means you can reduce your tax by up to $500 for each child. Better yet, this credit is in addition to the Child and Dependent Care Credit and the Earned Income Tax Credit.
What constitutes a "qualifying child?" Quite simply, a qualifying child is a child who is claimed as your dependent, was under age 17 at the end of 2000, is a United States citizen or resident alien, and is your son, daughter, adopted child, grandchild, stepchild, or foster child.
The more children you have, the better the tax credit may work for you. If you have one or two children, you can use the credit to reduce the tax you owe to zero, but you will not receive any remainder as a refund (nonrefundable). If you have three or more children, however, you may qualify for the additional Child Tax Credit, which is refundable.
As with all good things, there are certain restrictions in that the amount of the Child Tax Credit that you claim depends on your income. While the value of the credit is $500 per qualifying child, the total credit is reduced by $50 for each $1,000 (or part thereof) that your adjusted gross income exceeds $110,000 for joint filers, $75,000 for single filers, and $55,000 for married filing separately.
But any way you look at it, the Child Tax Credit helps put money back into your wallet, where you need it the most ... for food, clothes, school supplies, etc.
For more information on the Child Tax Credit, see the instructions for Form 1040 or Form 1040A. Also, you can download Publication 972, Child Tax Credit, on the IRS Web site at www.irs.gov, or ask for a free copy of the publication when you call the IRS toll-free at 1-800-829-3676.
Courtesy of ARA Content, www.aracontent.com, e-mail: info@aracontent.com
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