This credit is for people who have a qualifying child as defined on this page. It is in addition to the credit for child and dependent care expenses (on Form 1040, line 48, or Form 1040A, line 29) and the earned income credit (on Form 1040, line 66a, or Form 1040A, line 41a).

The maximum amount you can claim for the credit is $1,000 for each qualifying child.

You will need to figure your earned income using one of the worksheets in this publication if you are completing the Line 11 Worksheet (page 6) or Form 8812. Form 1040 filers, use the worksheet on page 8 to figure your earned income. Form 1040A filers, use the worksheet on page 9.

For this purpose, earned income includes only:

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 Tax Credit Worksheet Summary: This is an example of the Child Tax Credit Worksheet. The line items that are to be completed are: Under Part 1: 1. Number of qualifying children field multiplied by $1,000. Enter the result. field 2. Enter the amount, if any, of your advance child tax credit (before offset) field 3. Is line 1 less than line 2? Yes. STOP You cannot take this credit. If line 2 is more than line 1, you do not have to pay back the difference. checkbox No. Subtract line 2 from line 1. checkbox, field 4. Enter the amount from Form 1040, line 35, or Form 1040A, line 22 field 5. 1040 Filers. Enter the total of any exclusion of income from Puerto Rico, and Amounts from Form 2555, line 43 and 48; Form 2555-EZ, line 18; and Form 4563, line 15.--1040A Filers. Enter 0. field 6. Add lines 4 and 5. Enter the total. field 7. Enter the amount shown below for your filing status. field Married filing jointly--$110,000 Single, head of household, or qualifying widow(er)--$75,000 Married filing separately--$55,000 8. Is the amount on line 6 more than the amount on line 7? No. Leave line 8 blank. Enter 0 on line 9. checkbox Yes. Subtract line 7 from line 6. If the result is not a multiple of $1,000, increase it to the next multiple of $1,000 (for example, increase $425 to $1,000, increase 1,025 to $2,000, etcetera). checkbox, field 9. Multiply the amount on line 8 by 5% (.05). Enter the result. field 10. Is the amount on line 3 more than the amount on line 9? No. STOP You cannot take the child tax credit on Form 1040, line 49, or Form 1040A, line 33. You also cannot take the additional child tax credit on Form 1040, line 65, or Form 1040A, line 42. Complete the rest of your Form 1040 or 1040A. checkbox Yes. Subtract line 9 from line 3. Enter the result. Go to Part 2 on the next page. field Child Tax Credit Worksheet--Continued from page 4 Summary: This is an example of the second page of the Child Tax Credit Worksheet to determine the amount of child tax credit the taxpayer can claim. The line items to be completed are: Under Part 2: 11. Enter the amount from Form 1040, line 43, or Form 1040A, line 28. field 12. 1040 Filers. Enter the total of the amounts from lines 44 through 48.--1040A Filers. Enter the total of the amounts from lines 29 through 32. field 13. Are you claiming any of the following credits? Adoption credit, Form 8839 Mortgage interest credit, Form 8396 District of Columbia first-time homebuyer credit, Form 8859 No. Enter the amount from line 12. checkbox, field Yes. Complete the Line 13 Worksheet on the next page to figure the amount to enter here. checkbox, field 14. Subtract line 13 from line 11. Enter the result. field 15. Is the amount on line 10 of this worksheet more than the amount on line 14? No. Enter the amount from line 10. This is your child tax credit. Enter this amount on Form 1040, line 49, or Form 1040A, line 33. checkbox, field Yes. Enter the amount from line 14. See the TIP below. This is your child tax credit. Enter this amount on Form 1040, line 49, or Form 1040A, line 33. field Line 13 Worksheet Summary: This is an example of the Line 13 Worksheet used to determine the amount to be entered on line 13 of the Child Tax Credit Worksheet. The line items to be completed are: 1. Enter the amount from line 10 of the Child Tax Credit Worksheet on page 3. field 2. Enter your taxable earned income from the worksheet on page 8 or 9 that applies to you. field 3. Is the amount on line 2 more than $10,500? No. Leave line 3 blank, enter 0 on line 4, and go to line 5. checkbox Yes. Subtract $10,500 from the amount on line 2. Enter the result. checkbox, field 4. Multiply the amount on line 3 by 10% (.10) and enter the result. field 5. Is the amount on line 1 of the Child Tax Credit Worksheet on page 3 $3,000 or more? No. If line 4 above is zero, stop. Do not complete the rest of this worksheet. Instead, go back to the Child Tax Credit Worksheet on page 5 and do the following. Enter the amount from line 12 on line 13 and complete lines 14 and 15. Otherwise, leave lines 6 through 9 blank, enter 0 on line 10, and go to line 11 on the next page. checkbox Yes. If line 4 above is equal to or more than line 1 above, leave lines 6 through 9 blank, enter 0 on line 10, and go to line 11 on the next page. Otherwise, see 1040 Filers and 1040A Filers on page 6 and then go to line 6. checkbox If married filing jointly, include your spouse's amounts with yours when completing lines 6 and 7. 6. Enter the total of the following amounts from Form(s) W-2: field Social security taxes from box 4, and Medicare taxes from box 6. Railroad employees, see the bottom of page 7. 7. 1040 Filers. Enter the total of any--Amounts from Form 1040, lines 28 and 56, and Uncollected social security and Medicare or tier 1 R.R.T.A. taxes shown in box 12 of your Form(s) W-2 with codes A, B, M, and N.--1040A Filers. Enter 0. field 8. Add lines 6 and 7. Enter the total. field 9. 1040 Filers. Enter the total of the amounts from Form 1040, lines 63 and 64.--1040A Filers. Enter the total of any Amount from Form 1040A, line 41, and Excess social security and tier 1 R.R.T.A. taxes withheld that you entered to the left of Form 1040A, line 43. field 10. Subtract line 9 from line 8. If the result is zero or less, enter 0. Go to line 11 on the next page. field Line 13 Worksheet--Continued from page 5 Summary: This is an example of the second page of the Line 13 Worksheet. The line items to be completed are: 11. Enter the larger of line 4 or line 10. field 12. Is the amount on line 11 of this worksheet more than the amount on line 1? field No. Subtract line 11 from line 1. Enter the result. checkbox Yes. Enter 0. checkbox Next, figure the amount of any of the following credits that you are claiming. Use the amount from line 12 above when you are asked to enter the amount from Form 1040, line 49, or Form 1040A, line 33. Adoption credit, Form 8839 Mortgage interest credit, Form 8396 District of Columbia first-time homebuyer credit, Form 8859 Then, go to line 13. 13. Enter the total of the amounts from--Form 8839, line 18, and Form 8396, line 11, and Form 8859, line 11. field 14. Enter the amount from line 12 of the Child Tax Credit Worksheet on page 5. field 15. Add lines 13 and 14. Enter the total. Enter this amount on line 13 of the Child Tax Credit Worksheet on page 5. field

Before you begin:  ✓ Use this worksheet only if you were sent here from the Line 11 Worksheet on page 6 of this publication or line     4a of Form 8812, Additional Child Tax Credit.  ✓ Disregard community property laws when figuring the amounts to enter on this worksheet.  ✓ If married filing jointly, include your spouse's amounts with yours when completing this worksheet. 1. a. Enter the amount from Form 1040, line 7 1a. b. Enter the amount of any nontaxable combat pay received. Also enter this amount on Form 8812, line 4b. This amount should be shown in Form(s) W-2, box 12, with code Q. 1b. Next, if you are filing Schedule C, C-EZ, F, or SE, or you received a Schedule K-1 (Form 1065 or Form 1065-B), go to line 2a. Otherwise, skip lines 2a through 2e and go to line 3. 2. a. Enter any statutory employee income reported on line 1 of Schedule C or C-EZ 2a. b. Enter any net profit or (loss) from Schedule C, line 31; Schedule C-EZ, line 3; Schedule K-1 (Form 1065), box 14, code A (other than farming); and Schedule K-1 (Form 1065-B), box 9, code K1.* Reduce this amount by any unreimbursed nonfarm partnership expenses you deducted on Schedule E. Do not include any statutory employee income or any other amounts exempt from self-employment tax. Options and commodities dealers must add any gain or subtract any loss (in the normal course of dealing in or trading section 1256 contracts) from section 1256 contracts or related property 2b. c. Enter any net farm profit or (loss) from Schedule F, line 36, and from farm partnerships, Schedule K-1 (Form 1065), box 14, code A.* Reduce this amount by any unreimbursed farm partnership expenses you deducted on Schedule E. Do not include any amounts exempt from self-employment tax 2c. d. If you used the farm optional method to figure net earnings from self-employment, enter the amount from Schedule SE, Section B, line 15. Otherwise, skip this line and enter on line 2e the amount from line 2c 2d. e. If line 2c is a profit, enter the smaller of line 2c or line 2d. If line 2c is a (loss), enter the (loss) from line 2c. 2e. 3. Combine lines 1a, 1b, 2a, 2b, and 2e. If zero or less, stop. Do not complete the rest of this worksheet. Instead, enter -0- on line 2 of the Line 11 Worksheet on page 6 or line 4a of Form 8812, whichever applies 3. 4. Enter any amount included on line 1a that is: a. A scholarship or fellowship grant not reported on Form W-2 4a. b. For work done while an inmate in a penal institution (enter PRI and this amount on the dotted line next to line 7 of Form 1040) 4b. c. A pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan (enter DFC and this amount on the dotted line next to line 7 of Form 1040). This amount may be shown in box 11 of your Form W-2. If you received such an amount but box 11 is blank, contact your employer for the amount received as a pension or annuity. 4c. 5. a. Enter any amount included on line 3 that is also included on Form 2555, line 41, or Form 2555-EZ, line 18. Do not include any amount that is also included on line 4a, 4b, or 4c above 5a. b. Enter the amount, if any, from Form 2555, line 42, that is also deducted on Schedule C, C-EZ, or F, or included on Schedule E in partnership net income or (loss) 5b. c. Subtract line 5b from line 5a 5c. 6. Enter the amount from Form 1040, line 27 6. 7. Add lines 4a through 4c, 5c, and 6 7. 8. Subtract line 7 from line 3 8.

If you were sent here from the Line 11 Worksheet on page 6, enter this amount on line 2 of that worksheet.

If you were sent here from Form 8812, enter this amount on line 4a of that form.

*If you have any Schedule K-1 amounts and you are not required to file Schedule SE, complete the appropriate line(s) of Schedule SE, Section A. Put your name and social security number on Schedule SE and attach it to your return.

Steve and Gretchen Leaf have four children who are all qualifying children for the child tax credit. Steve and Gretchen's adjusted gross income (AGI) (Form 1040, line 38) is $112,000. This amount represents Steve's salary and is considered earned income. They will file a joint return. Assume that their tax (Form 1040, line 46) is $2,000.

Steve and Gretchen have the 2005 Form 1040 tax package and instructions. They want to see if they qualify for the child tax credit, so they follow the steps for line 52 in the instructions.

Leafs' filled-in worksheet Summary: This is an example of the Child Tax Credit Worksheet with items included as described in the text. Leafs' filled-in worksheet continued Summary: This is an example of the second page of the Child Tax Credit Worksheet with items included as described in the text. Form 8812 Additional Child Tax Credit 2002 Summary: This is an example of Form 8812 (2002) with items included as described in the text. Additionally, these line items are completed: Name(s) shown on return field contains Steve and Gretchen Leaf Your social security number field contains 678-00-4444

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