Question

HAROLD AND MARY HAVE TWO CHILDREN UNDER AGE OF 17, 2017 TAX LIABILITY OF 700.00.ASSUME THAT 15% OF EARNED INCOME ON EXCESS OF 3000 IS 3000. HOW MUCH CHILD TAX CREDIT WILL REDUCE THEIR 2017 TAX LIABILITY AND HOW MUCH CAN RECEIVE AS ADDITIONAL CTC REFUND

700 0 ,700 300, 700 1300, 2000 1300

Answer 1

For the purpose of availing child tax credit, the child must be a qualifying child.

The conditions to be fulfilled for a qualifying child as per IRS Publication 972 are as follows:

A Qualifying child must

1) be under the age of 17 by the end of tax year

2) be claimed as a dependent on the taxpayer's federal tax return.

3) be a U.S. citizen, resident alien or national

4) have lived with taxpayer for more than half of the tax year and

5) not has supported more than his or her own financial support to the taxpayer.

In the given case, the children fulfilled the above conditions and are qualifying children for the tax year 2017. The taxpayer can claim maximum child tax credit of $1000 per child using Form 1040.

Therefore , 700 child tax credit will reduce their 2017 tax liability and additional 1300 child tax credit refund can be received.