Is child tax credit separate from retirement savings contributions credit (Form 8880)?

[leegreathero]

According to 1040 instruction "2018 Child Tax Credit and Credit for Other Dependents Worksheet," I think it is making me reduce the child tax credit by the amount claimed with retirement savings contributions credit. 

1. Am I understanding this correctly? 

2. If yes, why would it ever do that to reduce my child tax credit? 

3. Then there is no point for me to claim retirement savings contributions credit, right?

[TaxGuyBill]

In MOST cases, claiming the Saver's Credit on Form 8880 WILL save you money.  However, it is dependent on various factors, including the amount of your credits, the amount of income tax on your tax return, and the amount of 'earned' income that you have.

[Hal_Al · Accepted solution]

The Child tax Credit hasn't been reduced (in most cases). The Retirement  Savers's Credit "pushed" some of the Child Tax Credit to the "Additional Child Tax Credit". That is, some of the child tax credit (the amount equal to the Savers credit) moved from line 12 of form 1040 to line 17.

If your Additional Child Tax Credit was already at the maximum (up to $1400 per child)*, then yes the Savers Credit did you no good ( it did, indeed, reduce your Child Tax credit).

*It's complicated. The Additional Child Tax Credit is 15% of you earned income over $2500.  So, not everybody gets the max $1400.  This effect could be seen at a lower  income level.