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Pub. 972, Child Tax Credit 2005 Tax Year

Publication 972 - Main Contents

Table of Contents

Child Tax Credit

This credit is for people who have a qualifying child as defined on this page. It is in addition to the credit for child and dependent care expenses (on Form 1040, line 48, or Form 1040A, line 29) and the earned income credit (on Form 1040, line 66a, or Form 1040A, line 41a).

The maximum amount you can claim for the credit is $1,000 for each qualifying child.

Qualifying Child

A qualifying child for purposes of the child tax credit is a child who:

  1. Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your grandchild),

  2. Was under age 17 at the end of 2005,

  3. Did not provide over half of his or her own support for 2005,

  4. Lived with you for more than half of 2005. (see Exceptions to “time lived with you” condition below), and

  5. Was a U.S. citizen, a U.S. national, or a resident of the United States. If the child was adopted, see Adopted child below.

For each qualifying child you must either check the box on Form 1040 or Form 1040A, line 6c, column (4), or complete Form 8901 (if the child is not your dependent).

Adopted child.   An adopted child is always treated as your own child. An adopted child includes a child lawfully placed with you for legal adoption.

  If you are a U.S. citizen or U.S. national and your adopted child lived with you all year as a member of your household in 2005, that child meets condition (5) above to be a qualifying child for the child tax credit.

Exceptions to “time lived with you” condition.    A child is considered to have lived with you for all of 2005 if the child was born or died in 2005 and your home was this child's home for the entire time he or she was alive. Temporary absences for special circumstances, such as for school, vacation, medical care, military service, or business, count as time lived with you.

  There are also exceptions to the “time lived with you” condition for kidnapped children and children of divorced or separated parents. For details, see the instructions for Form 1040, lines 52 and 6c, or Form 1040A, lines 33 and 6c.

Qualifying child of more than one person.   A special rule applies if your qualifying child is the qualifying child of more than one person. For details, see the instructions for Form 1040, lines 52 and 6c, or Form 1040A, lines 33 and 6c.

Limits on the Credit

You must reduce your child tax credit if either (1) or (2) applies.

  1. The amount on Form 1040, line 46, or Form 1040A, line 28, is less than the credit. If this amount is zero, you cannot take this credit because there is no tax to reduce. But you may be able to take the additional child tax credit. See Additional Child Tax Credit, later.

  2. Your modified adjusted gross income (AGI) is above the amount shown below for your filing status.

    1. Married filing jointly - $110,000.

    2. Single, head of household, or qualifying widow(er) - $75,000.

    3. Married filing separately - $55,000.

Modified AGI.   For purposes of the child tax credit, your modified AGI is your AGI plus the following amounts that may apply to you.

  • Any amount excluded from income because of the exclusion of income from Puerto Rico.

  • Any amount on line 43 or line 48 of Form 2555, Foreign Earned Income.

  • Any amount on line 18 of Form 2555-EZ, Foreign Earned Income Exclusion.

  • Any amount on line 15 of Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa.

  If you do not have any of the above, your modified AGI is the same as your AGI.

AGI.   Your AGI is the amount on Form 1040, line 38, or Form 1040A, line 22.

Claiming the Credit

To claim the child tax credit, you must file Form 1040 or Form 1040A. You cannot claim the child tax credit on Form 1040EZ. You must provide the name and identification number (usually a social security number) on your tax return (or Form 8901) for each qualifying child.

Earned Income

You will need to figure your earned income using one of the worksheets in this publication if you are completing the Line 11 Worksheet (page 6) or Form 8812. Form 1040 filers, use the worksheet on page 8 to figure your earned income. Form 1040A filers, use the worksheet on page 9.

For this purpose, earned income includes only:

  • Taxable earned income, and

  • Nontaxable combat pay.

Additional Child Tax Credit

This credit is for certain individuals who get less than the full amount of the child tax credit. The additional child tax credit may give you a refund even if you do not owe any tax.

How to claim the additional child tax credit.   To claim the additional child tax credit, follow the steps below.

  1. Make sure you figured the amount, if any, of your child tax credit.

  2. If you answered “Yes” on line 4 or line 5 of the Child Tax Credit Worksheet in the Form 1040 or Form 1040A instructions (or on line 13 of the Child Tax Credit Worksheet in this publication), use Form 8812 to see if you can take the additional child tax credit.

  3. If you have an additional child tax credit on line 13 of Form 8812, carry it to Form 1040, line 68 or Form 1040A, line 42.

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Child Tax Credit Worksheet. page 1

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Child Tax Credit Worksheet. page 2

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Line 11 worksheet page 1

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Line 11 worksheet page 2

1040 Filers - Earned Income Worksheet

Before you begin:  

✓Use this worksheet only if you were sent here from the Line 11 Worksheet on page 6 of this publication or line
4a of Form 8812, Additional Child Tax Credit.
✓Disregard community property laws when figuring the amounts to enter on this worksheet.
✓If married filing jointly, include your spouse's amounts with yours when completing this worksheet.
 
 
1. a. Enter the amount from Form 1040, line 7 1a.  
  b. Enter the amount of any nontaxable combat pay received. Also enter this amount on Form 8812, line 4b. This amount should be shown in Form(s) W-2, box 12, with code Q. 1b.  
    Next, if you are filing Schedule C, C-EZ, F, or SE, or you received a Schedule K-1 (Form 1065 or Form 1065-B), go to line 2a. Otherwise, skip lines 2a through 2e and go to line 3.    
2. a. Enter any statutory employee income reported on line 1 of Schedule C or C-EZ 2a.  
  b. Enter any net profit or (loss) from Schedule C, line 31; Schedule C-EZ, line 3; Schedule K-1 (Form 1065), box 14, code A (other than farming); and Schedule K-1 (Form 1065-B), box 9, code K1.* Reduce this amount by any unreimbursed nonfarm partnership expenses you deducted on Schedule E. Do not include any statutory employee income or any other amounts exempt from self-employment tax. Options and commodities dealers must add any gain or subtract any loss (in the normal course of dealing in or trading section 1256 contracts) from section 1256 contracts or related property 2b.  
  c. Enter any net farm profit or (loss) from Schedule F, line 36, and from farm partnerships, Schedule K-1 (Form 1065), box 14, code A.* Reduce this amount by any unreimbursed farm partnership expenses you deducted on Schedule E. Do not include any amounts exempt from self-employment tax 2c.      
  d. If you used the farm optional method to figure net earnings from self-employment, enter the amount from Schedule SE, Section B, line 15. Otherwise, skip this line and enter on line 2e the amount from line 2c 2d.      
  e. If line 2c is a profit, enter the smaller of line 2c or line 2d. If line 2c is a (loss), enter the (loss) from line 2c. 2e.  
3. Combine lines 1a, 1b, 2a, 2b, and 2e. If zero or less, stop. Do not complete the rest of this worksheet. Instead, enter -0- on line 2 of the Line 11 Worksheet on page 6 or line 4a of Form 8812, whichever applies 3.  
4. Enter any amount included on line 1a that is:            
  a. A scholarship or fellowship grant not reported on Form W-2 4a.      
  b. For work done while an inmate in a penal institution (enter “PRI” and this amount on the dotted line next to line 7 of Form 1040) 4b.      
  c. A pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan (enter “DFC” and this amount on the dotted line next to line 7 of Form 1040). This amount may be shown in box 11 of your Form W-2. If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or annuity. 4c.      
5. a. Enter any amount included on line 3 that is also included on Form 2555, line 41, or Form 2555-EZ, line 18. Do not include any amount that is also included on line 4a, 4b, or 4c above 5a.          
  b. Enter the amount, if any, from Form 2555, line 42, that is also deducted on Schedule C, C-EZ, or F, or included on Schedule E in partnership net income or (loss) 5b.          
  c. Subtract line 5b from line 5a 5c.      
6. Enter the amount from Form 1040, line 27 6.      
7. Add lines 4a through 4c, 5c, and 6 7.  
8. Subtract line 7 from line 3 8.  
   

  • If you were sent here from the Line 11 Worksheet on page 6, enter this amount on line 2 of that worksheet.

  • If you were sent here from Form 8812, enter this amount on line 4a of that form.

    
*If you have any Schedule K-1 amounts and you are not required to file Schedule SE, complete the appropriate line(s) of Schedule SE, Section A. Put your name and social security number on Schedule SE and attach it to your return.  
                 

1040A Filers - Earned Income Worksheet

Before you begin:  
✓Use this worksheet only if you were sent here from the Line 11 Worksheet on page 6 of this publication.
✓Disregard community property laws when figuring the amounts to enter on this worksheet.
 
             
1. a. Enter the amount from Form 1040A, line 7 1a.      
  b. Enter the amount of any nontaxable combat pay received. Also enter this amount on Form 8812, line 4b. This amount should be shown in Form(s) W-2, box 12, with code Q. 1b.      
  c. Add lines 1a and 1b.     1c.  
2. Enter any amount included on line 1a that is:        
  a. A scholarship or fellowship grant not reported on Form W-2 2a.      
  b. For work done while an inmate in a penal institution (enter “PRI” and this amount next to line 7 of Form 1040A) 2b.      
  c. A pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan (enter “DFC” and this amount next to line 7 of Form 1040A). This amount may be shown in box 11 of your Form W-2. If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or annuity 2c.      
3. Add lines 2a through 2c 3.  
4. Subtract line 3 from line 1c. Enter the result here and on line 2 of the Line 11 Worksheet on page 6 4.  
             

Detailed Example

Steve and Gretchen Leaf have four children who are all qualifying children for the child tax credit. Steve and Gretchen's adjusted gross income (AGI) (Form 1040, line 38) is $112,000. This amount represents Steve's salary and is considered earned income. They will file a joint return. Assume that their tax (Form 1040, line 46) is $2,000.

Steve and Gretchen have the 2005 Form 1040 tax package and instructions. They want to see if they qualify for the child tax credit, so they follow the steps for line 52 in the instructions.

Step 1.   In Step 1 of those instructions Steve and Gretchen determine all four children qualify for the child tax credit.

Step 2.   The Leafs check the box in column (4) of line 6c on Form 1040 for each child.

Step 3.   In Step 3 the Leafs find out they must use Publication 972 to figure their child tax credit because their AGI is more than $110,000. When they read Publication 972, they find out they must complete the Child Tax Credit Worksheet that begins on page 4.

Completing the Child Tax Credit Worksheet.   Steve and Gretchen fill out the worksheet (shown here) to find out how much child tax credit they can claim.

  1. Steve and Gretchen enter the number of qualifying children (4), multiply 4 by $1,000, and enter the result ($4,000) in the box for line 1.

  2. They enter their AGI ($112,000) in the box for line 2.

  3. They enter -0- in the box for line 3 since they did not exclude any income from Puerto Rico or any income on Form 2555, Form 2555-EZ, or Form 4563.

  4. They add $112,000 and $0 and enter the result ($112,000) in the box for line 4.

  5. They enter $110,000 in the box for line 5 since they will file a joint return.

  6. They check the “Yes” box in line 6 since the amount on line 4 ($112,000) is more than the amount on line 5 ($110,000). They subtract line 5 ($110,000) from line 4 ($112,000) and enter the result ($2,000) in the box for line 6.

  7. They multiply the amount on line 6 ($2,000) by 5% (.05) and enter the result ($100) in the box for line 7.

  8. They check the “Yes” box in line 8 since the amount on line 1 ($4,000) is more than the amount on line 7 ($100). They subtract line 7 ($100) from line 1 ($4,000) and enter the result ($3,900) in the box for line 8.

  9. They enter the amount from line 46 of their Form 1040 ($2,000) in the box for line 9.

  10. Steve and Gretchen did not have any of the credits on lines 47, 48, 49, 50, or 51 of Form 1040, so they enter -0- in the box for line 10.

  11. They check the “No” box on line 11 because they are not claiming any of the credits shown on line 11. They enter -0- in the box for line 11.

  12. They subtract the amount on line 11 ($0) from the amount on line 9 ($2,000) and enter the result ($2,000) in the box for line 12.

  13. They check the “Yes” box in line 13 since the amount on line 8 ($3,900) is more than the amount on line 12 ($2,000). They enter the amount from line 12 ($2,000) in the box for line 13. Their child tax credit is $2,000. They enter $2,000 on line 52 of their Form 1040.

Steve and Gretchen read the TIP in the worksheet and find that they may be able to take the additional child tax credit because they checked the “Yes” box in line 13.

  Steve and Gretchen complete their Form 1040 through line 67 and use Form 8812 to see if they can claim the additional child tax credit.

Completing Form 8812.   

  1. They enter the amount from line 8 of their Child Tax Credit Worksheet ($3,900) on line 1.

  2. On line 2, they enter the amount of their child tax credit ($2,000) from line 52 of their Form 1040.

  3. Steve and Gretchen subtract the amount on line 2 ($2,000) from the amount on line 1 ($3,900) and enter the result ($1,900) on line 3.

  4. Before completing line 4a, they read the instructions on the back of the form and find they should enter the amount from line 7 of their Form 1040 ($112,000) on line 4a.

  5. Neither Steve nor Gretchen had any nontaxable combat pay, so they leave line 4b blank.

  6. Since the amount on line 4a ($112,000) is more than $11,000, they check the “Yes” box on line 5, and subtract $11,000 from the amount on line 4a ($112,000) and enter the result ($101,000) on line 5.

  7. They multiply the amount on line 5 ($101,000) by 15% (.15) and enter the result ($15,150) on line 6. Next, they are asked if they have three or more qualifying children. Steve and Gretchen check the “Yes” box. Since line 6 ($15,150) is more than line 3 ($1,900), they skip Part II and enter the amount from line 3 ($1,900) on line 13. This $1,900 is their additional child tax credit. They also enter this amount on line 68 of their Form 1040.

Steve and Gretchen will get a child tax credit of $2,000 and an additional child tax credit of $1,900 for the year.

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Leaf's Child Tax Credit Worksheet page 1

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Leaf's Child Tax Credit Worksheet page 2

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Leaf's Filled-in Form 8812

Paperwork Reduction Act Notice.   We ask for the information on the worksheets in this publication to carry out the Internal Revenue laws of the United States. You are required to give us the information if requested. We need it to ensure that you are complying with these laws and to allow us to figure and collect the right amount of tax.

  You are not required to provide the information requested on a form (or worksheet in this publication) that is subject to the Paperwork Reduction Act unless the form (or publication) displays a valid OMB control number. Books or records relating to a form, its instructions, or this publication must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103.

  The average time and expenses required to complete these worksheets will vary depending on individual circumstances. For the estimated averages, see the instructions for your income tax return.

  If you have suggestions for making these worksheets simpler, we would be happy to hear from you. See Comments and suggestions, earlier.

How To Get Tax Help

You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. By selecting the method that is best for you, you will have quick and easy access to tax help.

Contacting your Taxpayer Advocate.   If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate.

  The Taxpayer Advocate independently represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels. While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review.

  To contact your Taxpayer Advocate:

  • Call the Taxpayer Advocate toll free at
    1-877-777-4778.

  • Call, write, or fax the Taxpayer Advocate office in your area.

  • Call 1-800-829-4059 if you are a TTY/TDD user.

  • Visit www.irs.gov/advocate.

  For more information, see Publication 1546, How To Get Help With Unresolved Tax Problems (now available in Chinese, Korean, Russian, and Vietnamese, in addition to English and Spanish).

Free tax services.   To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. It contains a list of free tax publications and an index of tax topics. It also describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics.

Access by computer
Internet. You can access the IRS website 24 hours a day, 7 days a week, at www.irs.gov to:

  • E-file your return. Find out about commercial tax preparation and e-file services available free to eligible taxpayers.

  • Check the status of your 2005 refund. Click on Where's My Refund. Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). Have your 2005 tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund.

  • Download forms, instructions, and publications.

  • Order IRS products online.

  • Research your tax questions online.

  • Search publications online by topic or keyword.

  • View Internal Revenue Bulletins (IRBs) published in the last few years.

  • Figure your withholding allowances using our Form W-4 calculator.

  • Sign up to receive local and national tax news by email.

  • Get information on starting and operating a small business.

Phone number
Phone. Many services are available by phone.

  • Ordering forms, instructions, and publications. Call 1-800-829-3676 to order current-year forms, instructions, and publications and prior-year forms and instructions. You should receive your order within 10 days.

  • Asking tax questions. Call the IRS with your tax questions at 1-800-829-1040.

  • Solving problems. You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Call your local Taxpayer Assistance Center for an appointment. To find the number, go to www.irs.gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service.

  • TTY/TDD equipment. If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications.

  • TeleTax topics. Call 1-800-829-4477 and press 2 to listen to pre-recorded messages covering various tax topics.

  • Refund information. If you would like to check the status of your 2005 refund, call 1-800-829-4477 and press 1 for automated refund information or call 1-800-829-1954. Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). Have your 2005 tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund.


Evaluating the quality of our telephone services. To ensure that IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. One method is for a second IRS representative to sometimes listen in on or record telephone calls. Another is to ask some callers to complete a short survey at the end of the call.

Walk-in services
Walk-in. Many products and services are available on a walk-in basis.

  • Products. You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD-ROM or photocopy from reproducible proofs. Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes.

  • Services. You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you're more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. No appointment is necessary, but if you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. To find the number, go to
    www.irs.gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service.

Address you may need
Mail. You can send your order for forms, instructions, and publications to the address below and receive a response within 10 business days after your request is received.


National Distribution Center
P.O. Box 8903
Bloomington, IL 61702-8903

Request information on CD-ROM
CD-ROM for tax products. You can order Publication 1796, IRS Tax Products CD-ROM, and obtain:

  • A CD that is released twice so you have the latest products. The first release ships in late December and the final release ships in late February.

  • Current-year forms, instructions, and publications.

  • Prior-year forms, instructions, and publications.

  • Tax Map: an electronic research tool and finding aid.

  • Tax law frequently asked questions (FAQs).

  • Tax Topics from the IRS telephone response system.

  • Fill-in, print, and save features for most tax forms.

  • Internal Revenue Bulletins.

  • Toll-free and email technical support.

Buy the CD-ROM from National Technical Information Service (NTIS) at www.irs.gov/cdorders for $25 (no handling fee) or call 1-877-233-6767 toll free to buy the CD-ROM for $25 (plus a $5 handling fee).

Request information on CD-ROM
CD-ROM for small businesses. Publication 3207, The Small Business Resource Guide CD-ROM for 2005, has a new look and enhanced navigation features. This year's CD includes:

  • Helpful information, such as how to prepare a business plan, find financing for your business, and much more.

  • All the business tax forms, instructions, and publications needed to successfully manage a business.

  • Tax law changes for 2005.

  • IRS Tax Map to help you find forms, instructions, and publications by searching on a keyword or topic.

  • Web links to various government agencies, business associations, and IRS organizations.

  • “Rate the Product” survey—your opportunity to suggest changes for future editions.

An updated version of this CD is available each year in early April. You can get a free copy by calling 1-800-829-3676 or by visiting www.irs.gov/smallbiz.

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