Earned Child Tax Credit?

Question

Is it true that the more you make the more you’ll receive back from the Earned Child Tax credit?
For instances, I’m a student with two children and only made 1,000 last year would I be receiving less if I claim them for the earned child tax credit , compared to if they’re father claimed them? (We all live together and we aren’t married.)

Answer 1

The EIC is distributed on a bell curve. Sometimes it increases as your income increases and then other times it decreases as your income increases. See it for yourself at the link below.

Answer 2

According to the chart, since you have 2 children and only had earnings of $1000 last year, you would only get a refund of about $400 (from Earned Income Credit) if you are filing head of household....since you are not married....but it would make more sense if their father claims them if he made more because, like the last poster said, it's on a curve and if he made more than you (but not over $38,000) then you would probably get a larger earned income credit (EIC). The Child Tax Credit only reduces the amount of taxes that you owe and it's not an actual refund but the Additional Child Tax Credit (I believe you have to have at least 3 children to qualify) actually gives you money back.

Just read the info the other poster put a link to because it explains everything and it should help your specific situation.

Answer 3

The child tax credit and the earned income credit (EIC) are two totally separate things. There is no earned child tax credit.

If you only made around $1000 last year, you wouldn't owe any taxes, so you'd get nothing for the child tax credit and no benefit from the exemptions if you claimed your children. For EIC you would get $78 if you didn't claim them, and $410 if you did, so your total benefit for claiming them would be the difference, or $332. If you are under age 25 and don't claim the kids, you would not get the EIC at all, so wouldn't get the $78 either.

You don't say how much their dad made. If he made enough to pay any federal tax, then he'd get up to $2000 of that wiped out by the child tax credit - that can only take your taxes down to zero, you don't get any extra back. If he has to pay any federal tax, the exemptions would also reduce the taxes owed. Depending on how much he made, he might or might not be eligible for the EIC - with two kids, he'd get something unless he made over $38,348. By claiming them, he'd also be able to file as head of household rather than single if he pays more than half of the cost of keeping up your home.

Since both of you are the biological parents of the children, either one of you can claim them, you get to decide.

The EIC amount goes up for awhile depending on how much you make, with kids it levels out from about $11,000 to around $16,000, then drops off until it goes to zero.

***Long story short, whichever one of you made more than last year should claim the kids.***