Child Tax credit – Your $1000 tax refund

In 2003 the U.S Congress, as part of the Jobs and Growth Tax Relief Reconciliation Act of 2003, decided to establish the Additional Child Tax Credit. This tax credit is a refundable credit available to parents who qualify under IRS criteria, worth up to 1000$ for every child under the age of 17 (at the end of the tax year).

The refund amount is calculated based on the number of children, filing status and  income earned during the tax year.

The Child tax credit, in its current  format, is in effect until the end of 2013, and will then be re-examined by congress in 2017.

Credit Structure:

1. In the initial stage the full 1000$ can be used as a non refundable credit. if you have an existing tax liability owed on your tax return, you could use the Child Tax credit in order to reduce or offset your tax liability.
2. If you don’t use the entire amount of the credit to reduce your tax liability, the IRS allows you to receive the remaining amount as a refundable credit, meaning you can receive the money in full as a refund. Utilizing the credit in this format is referred to as the Additional child tax credit.

 Please note: According to the law, in the event that you didn’t claim the Additional Child Tax Credit in previous years  the IRS allows you to make retroactive submission for the past three years (depending on the dates when citizenship and social security number were acquired for the child in question).