Child Tax Credit

Parents may claim a $1,000 credit against federal income tax for each child under age 17. The credit is phased out starting from $110,000 of adjusted gross income for married joint filers and ($75,000 for single filers).

The child credit is partly refundable; the refundable portion is referred to as the "additional child tax credit." You receive a refundable credit if your Child Tax Credit is greater than the total amount of income taxes you owe, as long as you had an earned income of at least $3,000.

Earned Income Tax Credit

A credit is available to certain low-income taxpayers who have earned income. The maximum credit in 2016 is up to $506 ($503 in 2015) for a taxpayer with no children and who has earned income less than $14,880 ($14,820 in 2015), and $3,373 ($3,359 in 2015) for a taxpayer with one child and earned income less than $39,296 ($39,131 in 2015). For a taxpayer with two children and earned income less than $44,648 ($43,454 in 2015), the maximum 2016 credit is $5,572 ($5,548 in 2015). For 3 or more children, higher limits apply.

Child and Dependent Care Tax Credit

A credit is allowed for a portion of qualified child or dependant care expenses that are paid in order for the taxpayer to work. The maximum amount of child care expenses that can be considered is $3,000 for one child or dependant, or $6,000 for two or more. The credit is 35% of eligible child care expenses with income of less than $15,000, gradually reduced to 20% of qualifying expenses for income exceeding $43,000.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.