What is the new child tax credit of 2013?


Quick Answer

The maximum Child Tax Credit or CTC for 2013 is up $1,000; the credit is refundable for families with a combined household earning of more than $3,000 a year. Prior to tax year 2009, the refundability threshold to qualify for the Child Tax Credit was $10,000, according to CSSNY.org. The American Recovery and Reinvestment Act of 2009 lowered the refundability threshold to $3,000 to allow more low-income families to avail of the tax benefit.

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Full Answer

The Taxpayer Relief Act of 2007 created the Child Tax Credit and its implementation began in tax year 1998. The CTC is a tax benefit offered by the federal government for families with dependent children aged 17 years and younger before the end of the tax year. The dependent should likewise be a citizen or at least a resident of the United States to be eligible. This tax benefit aims to lower or even eliminate the taxpayer's federal tax income liability.

For tax year 2013, the Additional Child Tax Credit, which is related to CTC, is also up to $1,000. Additional refunds of up to 15 percent were available through the Additional Child Tax Credit for a total earned income of $11,750 and below the income limitations, according to CrichtonMullings.com. The income limitations were $110,000 for married and filing jointly, $75,000 for single or head of household and $55,000 for married and filing separately.

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