Publication 972: Child Tax Credit Definition & Overview

KEY TAKEAWAYS

• Publication 972 was a document created by the IRS that outlined certain details surrounding the child tax credit. 
• The document included details about how to file and claim the child tax credit as well as other details. 
• Publication 972 was only used for tax years 2020 and previous. From 2021 onward, taxpayers must use Schedule 8812 as well as Form 1040.
• There can be certain income limits when it comes to who is eligible for the child tax credit.

What Was Publication 972: Child Tax Credit?

Publication 972 was the document that the Internal Revenue Service (IRS) used to outline how the child tax credit worked. The document described how to determine how much of the child tax credit a taxpayer could claim when they filed their tax return. 

It was only utilized for tax years leading up to 2021. After this, a few changes were made and taxpayers could not use Publication 972 for the child tax credit. As of 2021, taxpayers must use Schedule 8812 at the same time you file Form 1040. 

The new document created by the IRS includes updates about the changes to the child tax credit for the year. As well, it also includes instructions for how to claim the child tax credit and a handy worksheet to help you calculate how much of the child tax credit you are eligible to claim.

Eligibility to Fall Under Publication 972

In most cases, guardians, parents, and foster parents of children that are under the age of 17 are eligible to claim the child tax credit. Doing this can help reduce their total taxable income for the previous tax year. 

To claim the child tax credit, taxpayers must file Form 1040 or Form 1040NR. However, there are a few other eligibility criteria that are worth highlighting. When Publication 972 was in use in the tax years leading up to 2021, it outlined specific requirements for eligibility. 

It stated that any qualifying dependent or child must:

• Be included and claimed on an individual’s federal tax return as a dependent
• Be under seventeen years of age at the end of the tax period 
• Be a citizen of the United States, a national, or a resident alien
• Not providing over half of their own financial support 
• Not have lived with the taxpayer who filed their federal income tax return for more than half of the specific tax year when the return was filed 

Publication 972 Credit Amounts 

Another element of publication 972 was the disclosure of the amount of credit a taxpayer could get. In 2020, $2,000 was the maximum amount that could be requested and claimed for the child tax credit. That amount was double the amount compared to the $1,000 tax credit available in 2017. 

Publication 972 Refunds 

There can be times when refunds need to be issued, and publication 972 outlined how to receive a portion of unused credits that had been refunded. There is a specific portion of the refundable credit referred to as the additional child tax credit (ACTC). 

Low-income taxpayers who had credits that outweighed their total tax liabilities were eligible for a refund of up to $1,400. Families that have an annual income of over $2,500 can request an ACTC refund. In order to do this, taxpayers needed to complete and file Schedule 8812. 

What Is the Difference Between the Child Tax Credit and Additional Child Tax Credit? 

While they might sound as though they can be similar – and in many ways they are – the child tax credit and additional child tax credit have some differences worth highlighting. The child tax credit, which is outlined in Publication 972, is a nonrefundable tax credit. 

Essentially, this means that you can’t use the credit to help increase your tax refund. As well, you can’t use the tax credit to create a new tax refund if you wouldn’t have had one otherwise. 

On the other hand, the additional child tax credit is a refundable tax credit. This means that it works as a dollar-for-dollar reduction to help reduce the overall amount of tax that you owe on your federal tax return.

Summary

Publication 972 was a document that the IRS created to outline the amount taxpayers can claim for the child tax credit. The publication was only used up until the tax year of 2020. As of 2021, taxpayers must use Schedule 8812 with Form 1040 to determine their child tax credit amounts. 

In order to be eligible for the child tax credit when the publication was still in use, qualifying children needed to meet a few criteria. These included being under the age of 17 at the end of the tax year, being a U.S. citizen, a national, or a resident alien.