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The parent who
claims the dependency exemption for a child under age 17 is entitled to
claim the child tax credit.
Until 2008, the credit will be $700; in 2009, $800 and; in 2010, and
thereafter, $1,000.
However, the child tax credit is phased out for taxpayers with certain
adjusted gross incomes. For married taxpayers filing joint returns, the
phase out begins at $110,000, with complete phase out at $124,000. For
married taxpayers filing separate returns, the phase out begins at
$55,000, with complete phase out at $69,000. For unmarried/head of
household taxpayers, the phase out begins at $75,000, with complete
phase out at $89,000.
When parents separate, the custodial parent has the right to claim the
dependency exemption for a child, and therefore the child tax credit,
unless the custodial parent transfers the exemption to the non-custodial
parent.
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