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taxmap/pubs/p972-004.htm#en_us_publink100012097

Detailed Example(p10)


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Steve and Gretchen Leaf have four children who are all qualifying children for the child tax credit. Steve and Gretchen's adjusted gross income (AGI) (Form 1040, line 38) is $97,000. This amount represents Steve's salary and is considered earned income. They will file a joint return. Assume that their tax (Form 1040, line 46) is $3,371.
Steve and Gretchen have the 2009 Form 1040 tax package and instructions. They want to see if they qualify for the child tax credit, so they follow the steps for line 51 in the instructions.
taxmap/pubs/p972-004.htm#en_us_publink100012098

Step 1.(p10)


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In Step 1 of those instructions Steve and Gretchen determine all four children qualify for the child tax credit.
taxmap/pubs/p972-004.htm#en_us_publink100012099

Step 2.(p10)


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The Leafs check the box in column (4) of line 6c on Form 1040 for each child.
taxmap/pubs/p972-004.htm#en_us_publink100012100

Step 3.(p10)


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In Step 3 the Leafs find out they must use Publication 972 to figure their child tax credit because they are excluding $15,000 in income from Puerto Rico. When they read Publication 972, they find out they must complete the Child Tax Credit Worksheet that begins on page 4.
taxmap/pubs/p972-004.htm#en_us_publink100012101

Completing the Child Tax Credit Worksheet.(p10)


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Steve and Gretchen fill out the worksheet (shown on the next page) to find out how much child tax credit they can claim.
  1. Steve and Gretchen enter the number of qualifying children (4), multiply 4 by $1,000, and enter the result ($4,000) on line 1.
  2. They enter their AGI ($97,000) on line 2.
  3. They enter $15,000 on line 3 since they excluded income from Puerto Rico.
  4. They add $97,000 and $15,000 and enter the result ($112,000) on line 4.
  5. They enter $110,000 on line 5 since they will file a joint return.
  6. They check the "Yes" box on line 6 since the amount on line 4 ($112,000) is more than the amount on line 5 ($110,000). They subtract line 5 ($110,000) from line 4 ($112,000) and enter the result ($2,000) on line 6.
  7. They multiply the amount on line 6 ($2,000) by 5% (.05) and enter the result ($100) on line 7.
  8. They check the "Yes" box on line 8 since the amount on line 1 ($4,000) is more than the amount on line 7 ($100). They subtract line 7 ($100) from line 1 ($4,000) and enter the result ($3,900) on line 8.
  9. They enter the amount from line 46 of their Form 1040 ($3,371) on line 9.
  10. Steve and Gretchen did not have any of the credits on lines 47, 48, 49, or 50 of Form 1040, or any of the other credits listed on line 10 of the Child Tax Credit Worksheet, so they enter -0- on line 10.
  11. They check the "No" box on line 11 because they are not claiming any of the other credits shown on line 11. They enter -0- on line 11.
  12. They subtract the amount on line 11 ($0) from the amount on line 9 ($3,371) and enter the result ($3,371) on line 12.
  13. They check the "Yes" box on line 13 since the amount on line 8 ($3,900) is more than the amount on line 12 ($3,371). They enter the amount from line 12 ($3,371) on line 13. Their child tax credit is $3,371. They enter $3,371 on line 51 of their Form 1040.
Steve and Gretchen read the TIP in the worksheet and find that they may be able to take the additional child tax credit because they checked the "Yes" box on line 13.
Steve and Gretchen complete their Form 1040 through line 64a, and use Form 8812 to see if they can claim the additional child tax credit.
taxmap/pubs/p972-004.htm#en_us_publink100012102

Completing Form 8812.(p10)


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  1. They enter the amount from line 8 of their Child Tax Credit Worksheet ($3,900) on line 1.
  2. On line 2, they enter the amount of their child tax credit ($3,371) from line 51 of their Form 1040.
  3. Steve and Gretchen subtract the amount on line 2 ($3,371) from the amount on line 1 ($3,900) and enter the result ($529) on line 3.
  4. Before completing line 4a, they read the instructions on the back of the form and find they should enter the amount from line 7 of their Form 1040 ($97,000) on line 4a.
  5. Neither Steve nor Gretchen had any nontaxable combat pay, so they leave line 4b blank.
  6. Since the amount on line 4a ($97,000) is more than $3,000, they check the "Yes" box on line 5, and subtract $3,000 from the amount on line 4a ($97,000) and enter the result ($94,000) on line 5.
  7. They multiply the amount on line 5 ($94,000) by 15% (.15) and enter the result ($14,100) on line 6. Next, they are asked if they have three or more qualifying children. Steve and Gretchen check the "Yes" box. Since line 6 ($14,100) is more than line 3 ($529), they skip Part II and enter the amount from line 3 ($529) on line 13. This $529 is their additional child tax credit. They also enter this amount on line 65 of their Form 1040.
Steve and Gretchen will get a child tax credit of $3,371 and an additional child tax credit of $529 for the year.
taxmap/pubs/p972-004.htm#en_us_publink100012103