Over the past few years you might have noticed a new form in your tax return called Form 8812 - Additional Child Tax Credit.
What is this form? And what is the meaning of this oddly named credit?
Why the credit is called Additional Child I'm not sure, but possibly it is because originally the credit was for families with three or more children. But most likely it is because it is used to refund the leftover or unused part of the child tax credit . So on form 8812 you will request an additional amount that was left over from the child tax credit.
NEW for 2012! Form 8812 is now called Schedule 8812 - Child Tax Credit. A new Part one has been added (and changing the old Part one to Part two etc.) for qualifying children with ITINs. This is also necessary for filing Child Tax Credit not only Additional Child Tax Credit. So filers you have qualifying children with ITINs need to file Schedule 8812 and attach it to their tax return even if they do not file for additional child tax credit.
Before you can fill out this form you need to figure your child tax credit and see how much you cannot use for the child tax credit.
There are two ways to figure out the additional credit. You use the one that is more beneficial to you.
I wonder if anybody ends up using the second method since the first method asks to multiply most of the income with 15% and the social security tax is only 7.5%. And even then the earned income credit is deducted from it.
The only scenario that it can work is with somebody earning very little (less than $6000-) but not eligible for earned income credit (maybe a noncustodial parent who is claiming three or more children; or a US citizen that does not live in the US and has three or more children).
Updated January 6, 2014
Child Tax Credit
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How much will you get for the Child and Dependent Care Credit?
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For more information or to see if you are eligible see the Child and Dependent Care Credit page.
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