Single, head of household, income is $7000. However my child tax credit for 2 kids is $697. Can you explain please? from my understanding I should get $1000 per child

 
Hal_Al
Level 15

Deductions & credits

No, you do not get a flat $1000 per child. Your income is too low, to get the full $2000.

 The child tax credit  (CTC) is  limited to your tax liability. The CTC is a non-refundable credit and can only reduce your income tax to 0, It can not help you beyond eliminating your tax liability. But, if you have more than $3000 of earned income, some or all of it is usually given back to you thru the "Additional Child tax credit". That is, part of the CTC may be on line 43 of form 1040A instead of line 35 (lines 67 & 52 of form 1040).    In the on-line version of TT,  the  main Form 1040, 1040A or 1040EZ can be seen through Tools, View Tax Summary, Preview My 1040 or  (RUE) go to Print Center and then choose to Preview. The ACTC is calculated on form 8812; that form is not viewable in the online version of TT until you have paid for your return. But, the ACTC is basically 15% of your earned income over $3000. So, apparently you actual income is $7647.

Deductions & credits

thank you that helps me to understand. However, filing Last year  I only had 1 child, so this year I was looking to see how it would change if I claim one child or 2 children. And either way is no difference in credit numbers.... Why is that?

Deductions & credits

If you have a low income then you have a low tax on it.  The credits can only reduce your tax to zero.  So it won't matter how much credits you get.  You can only use a certain amount.
Hal_Al
Level 15

Deductions & credits

The CTC  calculation is 15% of your earned income over $3000, but no more than $1000 per child. So you have a potential $2000 credit. But, since 15% of $$7000 is less than $1000; that's all you get no matter how many kids you have. You should get about $450 more Earned Income Credit (EIC) for a 2nd child, but not more CTC/ACTC.
If you live with another close relative, e.g. your parent, it is legal for that relative to claim one of your children, as long as they lived together more than half the year

Deductions & credits

15 percent of the $7000 = $1050. ...So how did you came up with less then $1000?!!

Deductions & credits

15 percent of (7000 U.S. dollars) =
1050 U.S. dollars


7,000.00
Tip %

15%
Number of people

1
Tip
$1,050.00

Deductions & credits

@kambizamjad99   You are posting to a three year old thread.  You must have missed the part of the response that said the CTC is limited to the amount of tax liability the person has.  So if the tax liability was less than $1000, the CTC is less than $1000.
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

Deductions & credits

@kambizamjad99   You are posting to a three year old thread.  You must have missed the part of the response that said the CTC is limited to the amount of tax liability the person has.  So if the tax liability was less than $1000, the CTC is less than $1000.
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

Deductions & credits

@kambizamjad99 For your 2018 tax return, the CTC has changed and has increased to $2000.
<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/4482394-how-will-tax-reform-affect-my-2018-federal-tax-return">htt...>
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
Hal_Al
Level 15

Deductions & credits

And the ACTC is now 15% of your earned income over $2500, but not more than $1400.