The IRS has long given preferential tax treatment to taxpayers with dependent children. One such example is Form 1040’s Child Tax Credit (Line 51). Notwithstanding a taxpayer’s eligibility for that credit, the IRS also offers a lesser known child credit on Line 65 – the Additional Child Tax Credit (“ACTC”). To determine ACTC eligibility, a taxpayer must first complete the Child Tax Credit Worksheet (see page 45-46). Located at the end of the Worksheet, the “TIP” section explains which types of taxpayers may be able to claim the ACTC. More specifically, taxpayers answering “Yes” on either Line 9 or Line 10 of the Worksheet are told to complete two steps to determine the size of their potential ACTC:
(1) Complete Form 1040 through Line 64, and
(2) Complete Schedule 8812 to verify ACTC eligibility
Should the Line 13 value of the completed Schedule 8812 be a positive value, a taxpayer is entitled to the ACTC and should transfer the value to Line 65 of Form 1040.
NOTE: The ACTC may give taxpayers a refund even if they do not owe any federal income taxes.
Photo by: Stephan Hochhaus