2012 Child Tax Credit

Feb 27, 2013 by


Two child tax credits and their adoring credit beneficiaries.

I think the estimated average cost to raise a kid to age 18 in the U.S. exceeds a quarter-million dollars now. And that could easily double if you don’t lock into an unlimited texting account before the kid hits kindergarten. 🙂

But now’s the time of year for you to get a little something back.

Child Tax Credit (Not Deduction)

To help ease the financial burden of child-rearing, your always generous Uncle Sam created the Child Tax Credit. This isn’t a deduction, it’s a credit, which is far better. While deductions reduce your taxable income, credits deal a direct blow to your tax bill: A $100 credit puts $100 in your pocket, but a $100 deduction may put around $15 in your pocket.

What Are My Kids Child Tax Credits Worth?

The Child Tax Credit can cut your tax bill up to $1,000 per head!

“I’m Sold. How Do I Sign My Kid Up for This Child Tax Credit?”

To learn whether you’re eligible for the child tax credit, first turn off, then hide your kids’ computers, iPods, and smartphones while they’re asleep. Then unplug everything in the house to create the appearance of a power failure. When your kids wake up, there will be nothing for them to do except talk to you for a few minutes. Now’s your chance to ask your kids these questions:


  1. Are you my son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of these?
  2. Were you younger than 17 at the end of 2012?
  3. Did you provide less than half of your own support in 2012?
  4. Did you live with me for more than half of 2012?
  5. Am I claiming you as a dependent on my tax return? (You’d probably best answer this one.)
  6. Did you not file a joint tax return for 2012?
  7. Are you a U.S. citizen, a U.S. national, or a U.S. resident alien?

If your kid answers ‘yes’ to all of these, congratulations, you’ve got yourself a Qualifying Child!

My Kid Qualifies. Do I Get $1,000?

Not so fast, bub. Besides qualifying your kid for the Child Tax Credit, Uncle Sam wants first to take a look at your income before deciding whether you’re deserving. Your Child Tax Credit will be reduced to something less than $1,000 per kid if:

  • You’re married, filing jointly and your 2012 Adjusted Gross Income (AGI) is over $110,000
  • You’re single, head of household or a qualifying widower and your 2012 AGI is over $75,000
  • You’re married, filing separately and your 2012 AGI is over $55,000.

Also, to claim the Child Tax Credit, you must file form 1040, 1040A, or 1040NR (and certainly not 1040EZ or 1040NR-EZ!).

Don’t Take My Word For It

As with all things U.S. Tax Code, there are voluminous details. Please refer to the unusually concise 11-page IRS Publication 972, clearly titled “Child Tax Credit,” which includes a helpful Child Tax Credit worksheet.

What About You?

How much do you expect to make off of your kids when you file your taxes this year?

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