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Tax Credit Formulas:
Child Tax Credit (CTC): Up to $2,000 per qualifying child
Earned Income Credit (EIC): Based on income, filing status, and number of children
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The Child Tax Credit (CTC) and Earned Income Credit (EIC) are refundable tax credits designed to help low- to moderate-income working individuals and families. The CTC provides up to $2,000 per qualifying child, while the EIC amount varies based on income, filing status, and number of children.
Child Tax Credit: Provides up to $2,000 per qualifying child under 17. Up to $1,600 may be refundable per child as the Additional Child Tax Credit.
Earned Income Credit: The amount depends on your income, filing status, and number of qualifying children. The credit increases with each additional child up to three children.
Details: These credits can significantly reduce tax liability and may result in a refund even if no taxes are owed. They are particularly valuable for working families with children.
Tips: Enter your filing status, adjusted gross income (AGI), and number of qualifying children. The calculator will estimate your potential CTC and EIC amounts.
Q1: Who qualifies for these credits?
A: You must have earned income and meet income limits. For CTC, children must be under 17, related to you, and meet other requirements.
Q2: Are these credits refundable?
A: EIC is fully refundable. CTC is partially refundable (up to $1,600 per child as Additional Child Tax Credit).
Q3: What counts as earned income?
A: Wages, salaries, tips, and net earnings from self-employment. Doesn't include investment income over $11,000.
Q4: Can I claim both credits?
A: Yes, if you qualify for both, you can claim them on your tax return.
Q5: How do I claim these credits?
A: File a federal tax return and complete the appropriate forms (Schedule 8812 for CTC, Schedule EIC for EIC).