Child Tax Credit

Tax relief is available in the form of a child tax credit. This credit is not a deduction. It is an actual reduction in the amount of taxes that parents have to pay. The amount of credit that is offered by this tax reduction increased from $500 for each child in 2002 to $1,000 for each child in 2003 and 2004. Completion of form 8812 is needed in order to calculate the amount of relief that will be received. Children must be under the age of eighteen, be claimed as a dependent and be a United Sates resident in order to qualify for the credit. Any family whose income is between $27,000 and $110,000 is eligible to receive the credit. To claim the credit, form 1040 or 1040A must be used with form 1040EZ not allowing the credit to be claimed.

Child and Dependent Care Credit

Typically, a child must be under the age of thirteen to qualify for child and dependent care credit. However, children with disabilities that require them to be heavily supervised are exempt from this age limit. Up to $3,000 is awarded to those with one dependent and up to $6,000 is awarded to those families with two or more dependents. The cost of regular childcare services, after-school programs, and summer camp qualify, while overnight summer camp expenses no not meet qualifications. Payment to a relative for child care falls under the qualifications for relief as long as the relative is not a dependent as well. The average relief provided is $600.

Earned Income Tax Credit

Families that file a married joint tax return are eligible to receive an Earned Income Tax Credit (EITC). To qualify, there must be one or more qualifying children in the home. Qualifying children are defined as children that are under the age of nineteen at the end of the year and are a biological, adopted child, step child, or foster child who were in residence with the taxpayer for more than six months during the calendar year. Children who are between the ages of nineteen and twenty-three and who are full-time students also qualify. Children with severe disabilities qualify regardless of age.