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It is important for you to know the tax credits that
may apply to you. SKS Tax Service can assist you to find those
credits you may utilize on your federal income tax form to increase
the tax refund you receive or decrease the amount you have to
pay.
Child Tax Credit
This credit is for people who have a qualifying child as defined
below. 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 descendent or any of them
(for example, your grandchild, niece or nephew),
2. Was under age 17 at the end of 2007,
3. Did not provide over half of his or her own support for 2007,
4. Lived with you for more than half of 2007, and
5. Was a U.S. citizen, U.S. national, or U.S. resident alien.
Limits on the Credit
Your child tax credit may be reduced it either (1)
or (2) applies.
1. If the amount of your tax liability is zero, you cannot take
this credit because there is no tax to reduce.
2. Your modified adjusted gross income is above the amount shown
below for your filing status.
a. Married filing jointly - $110,000.00
b. Single, head of household, or qualifying widow(er) - $75,000.00
c. Married filing separately - $55,000.00
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.
Child and Dependent Care Credit
To be able to claim the credit for child and dependent
care expenses, you must file Form 1040 or Form 1040A (or Form
1040NR) and meet all the following tests.
1. The care must be for one or more qualifying person who is
identified on the form you use to claim the credit. (see qualifying
person)
2. You (and your spouse if you are married) must have earned
income during the year.
3. You must pay child and dependent care expenses so you (and
your spouse if you are married) can work or look for work.
4. You must make payments for child and dependent care to someone
you (and your spouse) cannot claim as a dependent. If you make
payments to your child, he or she cannot be your dependent and
must be age 19 or older by the end of the year. You cannot make
payments:
a. Your spouse, or
b. The parent of your qualifying child who is your qualifying
person and under age 13.
5. Your filing status must be single, head of household, qualifying
widow(er) with dependent child, or married filing jointly. You
must file a joint return if you are married, unless and exception
applied to you.
6. You must identify the care provider on your tax return.
7. If you exclude or deduct dependents care benefits provided
by a dependent care benefit plan, the amount you exclude or
deduct must be less than the dollar limit for qualifying expenses
(generally, $3,000 if one qualifying person was cared for, or
$6,000 if two or more qualifying persons were cared for). If
two or more qualifying persons were cared for, the amount you
exclude or deduct will always be less than the dollar limit,
since the total amount you can exclude or deduct is limited
to $5,000.
Qualifying Person
Your child and dependent care expenses must be for
the care of one or more qualifying persons. A qualifying person
is:
1. Your qualifying child who is your dependent and who was under
age 13 when the care was provided.
2. Your spouse who was physically or mentally not able to care
for himself or herself and lived with you for more than half
the year, or
3. A person who was physically or mentally not able to care
for himself or herself, lived with you for more than half the
year, and either:
a. Was your dependent, or
b. Would have been your dependent except that:
i. He or she received gross income of $3,400 or more,
ii. He or she filed a joint return, or
iii. You or your spouse if filing jointly could be claimed as
a dependent on someone else’s 2007 return.
Note: Child of divorced or separated parents or parents
living apart.
Even if you cannot claim your child as a dependent, he or she
is treated as your qualifying person if:
• The child was under age 13 or was physically or mentally
not able to care for himself or herself,
• The child
received over half of his or her support during the calendar
year from one or both parents who are divorced or legally separated
under a decree of divorce or separate maintenance, are separated
under a written separation agreement, or lived apart at all
times during the last six months of the calendar year,
•
The child was in the custody of one or both parents for more
than half the year, and
• You were the child’s custodial parent (the parent
with whom the child lived for the greater part of 2007).
The non custodial parent cannot treat the child as a qualifying
person even if that parent is entitled to claim the child as
a dependent under the special rules for a child of divorced
or separated parents.
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