New Act Makes More Taxpayers Eligible for Child Tax Credit

Most taxpayers with children are familiar with the child tax credit. It gives individuals with depend- ent children under age 17 a $1,000 per child credit. This can really add up if you have three or four children.

Beginning in 2009, the definition of a qualifying child changes. The new definition requires your child to be your dependent, be younger than you, and if your child files a joint return, they will be disqualified, unless the return was filed only to claim a refund.

In 2008, the credit was based on 15 percent of the taxpayer’s earned On earned income in excess of $ 8,500. The threshold has been reduced in 2009, to earned income over $ 3,000. The reduction will allow more taxpay- ers to use the additional child tax credit and increase the amount of tax refund they receive.