Today TaxMama hears from Don in Idaho, who’s being helpful. Don says, “I have a couple of friends who are trying to get their lives in order. They earned about $16,175.00 last year & have 3 children under age 5. I calculate they can receive $730 in Additional Child Tax Credit. Is there anyway they can get the Child Tax Credit? It’s so much more!“
Hi Don,
The Child Tax Credit itself only works up to the amount of the total tax liability. If the tax liability is zero, so is the Child Tax Credit. Sorry.
The additional Child Tax Credit is paid even if someone owes no taxes. It’s like a negative tax. That’s why you see that $730.
Using TurboTax’s quick estimator on the site, I come up with the same $730 that you do. That only seems to take the additional child tax credit into account.
But if you actually prepare the tax return using live tax software, the amount will be higher.
Take a look at the Earned Income Tax Credit (EITC) tables for income at $16,150 – $16,200 (page 4) https://www.irs.gov/pub/irs-utl/eic_table.pdf
You can see that the EITC is over $4,000 at their income level – in addition to the $730 above. When you help them prepare their tax return, they’ll end with close to $5,000 from IRS – plus whatever your state may give them, if anything.
You’re going to be quite the hero!
And remember, you’ll find answers to lots of questions about low income tax credits and other tax information, free. Where? At TaxMama.com
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