The child tax credit is unique because taxpayers who cannot benefit from the nonrefundable credit may be able to qualify for the refundable additional child tax credit on Form 8812. In this lesson, we will learn about both credits and their relationship to each other. Some taxpayers may not be aware of it, so your time, effort, and understanding of this unique credit may result in a lower tax for the taxpayer.
In tax software, the child tax credit is entered on the nonrefundable credits screens; the additional child tax credit is entered on the payments screens. Form 1040EZ taxpayers cannot take this credit.
The intake and interview sheet, along with the interview tips in the Volunteer Resource Guide (Tab G) will be your critical tools in determining eligibility for the credit.
Do not confuse these credits with the child and dependent care tax credit!