@VolvoGirl - The non-refundable portion of the child tax credit is $2000 per child limited by the tax liability. Period. So if all the income is unearned and that drives a tax liability, then there is a child tax credit, but there is NO credit for the 'additional tax credit' becuase it is THAT portion of the credit that requires earned income
let's go through the rules again, assuming $40,000 of UNEARNED income (let's assume it's all ordinary income) for someone filing joint with 2 dependents. The taxable income is $14,100. The tax tables say the tax liability is $1408. (10% tax bracket).
Child Tax Credit – $2,000 per child, limited by tax liability.. so the tax credit is $1408.
•Additional Child Tax Credit - lower of
- $1,500 per child $3000 in this example
- 15% of earned income over $2,500 $-0- in this example
- $2,000 per child less Child Tax Credit $2592 in this example
so even with NO earned income but $40,000 of unearned income. there is Child Tax Credif of $1408.
@Viking99 - assuming your $20,000 of income is UNEARNED, there is no Child Tax Credit (because the tax liaiblity is zero) and there is NO 'additonal child tax credit' because there is no earned income. EITC would also be zero because there is no "earned income"
