Child Tax Credit

In 1997, Congress passed a federal Child Tax Credit (CTC) for families with dependent children. This credit became effective beginning in the 1998 tax year. The credit was originally designed only to reduce federal income tax liability, however, in 2001 Congress passed legislation enabling workers earning above a certain annual income to qualify for the Child Tax Credit as a refund even if their income tax liability was zero. For tax years beginning January 2006 and after, in addition to the federal child tax credit, eligible New York State residents can claim the Empire State Child Credit. The Tax Relief and Job Creation Act of 2010 expanded the Additional Child Tax Credit making more low-income families eligible. It is currently authorized through the 2012 tax year.

Unlike a government benefit, which is funded through specific allocations and expenditures, federal tax credits are dispersed from tax revenue collected by the IRS.

The Child Tax Credit (CTC) is a tax benefit offered by the federal government for taxpayers raising dependent children under the age of 17. It is designed to reduce or eliminate a taxpayer’s federal income tax liability and may provide a refund.

The Additional Child Tax Credit may provide a refund even if the individual does not owe a tax. The total amount of the Child Tax Credit and any Additional Child Tax Credit cannot exceed the maximum of $1,000 for each qualifying child. For information on the Additional Child Tax Credit, see below, Additional Child Tax Credit.

The New York State Empire Child Credit is a refundable state credit for taxpayers with dependent children age four and over. For information on the NYS Empire Child Credit, see below, New York State Empire Child Credit.