What It Is
If you have children who are under age 17 as of the end of the tax year, you may be eligible to receive a tax credit of up to $1,000 per child on your tax return. The credit may be limited if your income exceeds the levels listed below. This credit is in addition to any exemptions you may already claim for dependents and is just a reduction of any taxes you may owe. To have the CTC refunded, you must have taxable earned income above $8,500 and have your CTC be worth more than the tax you owe.

Are You Eligible?
• Each dependent you claim must be a U.S. citizen or resident. You can claim your child, stepchild, adopted child, grandchild or great-grandchild. Under a new definition of a "qualified child," you can also claim the credit for siblings, step-siblings and half-siblings that live with you. Foster children qualify if they were placed with you by a court or authorized agency.

• Each dependent must live with you more than half the year and must not provide more than half of their own support.

• Each qualified child must have a Tax Identification Number (TIN), most commonly a Social Security number

The child tax credit is reduced or eliminated if your adjusted gross income is above certain thresholds. The amount of the credit is reduced by $50 for each $1,000 (or fraction thereof) by which the taxpayer's modified adjusted gross income exceeds the maximum amount for that type of filing. These maximum amounts are as follows:

• $110,000 in the case of a joint return
• $75,000 in the case of an unmarried individual
• $55,000 in the case of a married individual filing a separate return

Eventually as income rises, the CTC will reach $0 and be worthless as a tax credit.

How To Apply
1-800-829-3676
Website - http://www.irs.gov/publications/p972/ar02.html