Mastering Child Tax Credit Calculations

1. Lesson 6 Child Tax Credit

2. Objectives • Calculate the Child Tax Credit using the child tax credit worksheet • Calculate the Additional Child Tax Credit by using Form 8812, Additional Child Tax Credit

3. Intake/Interview Process Form 13614 – Intake and Interview Sheet – Credits Section

4. Qualifying Child • Relationship • Age • Citizenship • Support • Residency

5. Child Tax Credit • Exception to “Time-Lived-With-You” Requirement • Child born/died in 2006 • Kidnapped Child • Special Rules for Children of Divorced or Separated Parents.

6. Child Tax Credit • Limits on credit • Modified AGI

7. Check Withholding • The child tax credit decreases the tax liability dollar for dollar, but not below zero. • The taxpayer may want to adjust his or her withholding, if he or she is having too much tax withheld.

8. Additional Child Tax Credit • Information about the Additional Child Tax Credit. • Use Form 8812, Additional Child Tax Credit, to compute the credit.

9. Additional Child Tax Credit • Before completing the form, gather the following information: • Earned Income Credit Amount • Taxable earned income • Any adjustment to income for self-employment tax • If the taxpayer has three or more children, total Social Security and Medicare taxes withheld (Form W-2, boxes 4 and 6).

10. Quality Review (QR) Form 8158 – Quality Review Checklist Adjustments, Deductions, and Credits Section

11. Lesson Summary • Interview Tips • Exercise 1 • Questions