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Federal and New York State Child Tax Credits

Reducing Your Family Tax Bill

Federal Child Tax Credits

The Child Tax Credit (CTC) is a tax credit offered by the federal government for taxpayers raising dependent children under the age of 17. It is designed to reduce or eliminate a taxpayer’s federal income tax liability and may provide a refund of any CTC remaining after the taxpayer’s liability has been met.

Benefits:

Workers eligible for the Child Tax Credit will receive it as a refund of some or all of the income tax withheld from their pay during the year, or as a reduction of income tax they otherwise would have to pay to the IRS with their tax return. Workers earning above $3,000 in 2014 may also receive an Additional Child Tax Credit (the refundable CTC).

Eligibility:

All taxpayers who have qualifying children and meet income threshold guidelines are eligible for the Child Tax Credit, though the amount of the credit depends on the parent’s income and tax liability.

For the purposes of determining eligibility for the CTC, “qualifying children” are:

A child claimed for the CTC must be under age 17 at the end of 2014. The child must live with the worker for more than half of the year in the U. S. and must be either a citizen or resident alien. The child must have either a Social Security Number or an Individual Taxpayer Identification Number (ITIN).

New York’s Empire State Child Credit

The Empire State Child Credit is a refundable credit for full-year New York State residents who:

  1. have a federal child tax credit or a federal additional child tax credit and a qualifying child, or
  2. meet certain income thresholds and have a qualifying child. A qualifying child is a child who qualifies for the federal child tax credit and is, at least, four years old. For low- and moderate-income taxpayers, the credit equals the greater of $100 per qualifying child or 33 percent of the taxpayer’s allowed federal child credit.

Examples:

The Child Tax Credit does not affect the taxpayer’s eligibility for the Earned Income Tax Credit or the Child and Dependent Care Credit. But, because the federal Child and Dependent Care Tax Credit is counted before figuring the Child Tax Credit and may completely eliminate any income tax liability, that may affect the size of the CTC received by the family.

How to Claim the Federal CTC and the Empire State Child Credit:

To receive the Child Tax Credit, a worker must file either federal Form 1040 or 1040A and complete the Child Tax Credit Worksheet to determine how much of the income tax owed is reduced or eliminated by the $1,000 per child CTC and enter that amount on the form. If the CTC eliminates the income tax, the Worksheet instructions direct workers to, then, complete Schedule 8812, “Additional Child Tax Credit,” to determine if they qualify for an additional refund. If so, that amount is also entered on the tax form. Schedule 8812 must also be attached to the tax return to claim the additional refund amount.

Low-income workers can get free help with federal tax preparation through a program called Volunteer Income Tax Assistance (VITA). For information, call 1-800-TAX-1040 (1-800-829-1040).

To claim New York’s Empire State Child Credit, a taxpayer must complete and then submit the form IT- 213 Claim for the Empire State Child Credit with his or her tax return.

Federal Tax Forms

Forms and instructions are available on the Internal Revenue Service website.

NYS Tax Forms

Forms and instructions are available on the New York State Department of Taxation and Finance website.