Code Section 24
| Code Section | Effective Date | Name of Act | Name of Provision | 10yr Revenue Estimate ($millions) |
|---|---|---|---|---|
| 24 | 12/31/2012 | The American Taxpayer Relief Act of 2012 | Extension of reduced earnings threshold for additional child tax credit | -50,518 |
| 24 | 12/31/2012 | The American Taxpayer Relief Act of 2012 | Increase the child tax credit | -354,493 |
| 24 | 12/31/2010 | The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 | Child Tax Credit | -71,697 |
| 24 | 12/31/2010 | The Tax Relief Unemployment Insurance Reauthorization, and Job Creation Act of 2010 | Child Tax Credit | -19,743 |
| 24 | 12/31/2008 | The American Recovery and Reinvestment Act of 2009 (Public Law 111-5) | Increase of refundable portion of the child credit | -14,830 |
Extension of reduced earnings threshold for additional child tax credit
Explanation of Provision
The provision extends for five years the earned income threshold of $3,000.
Increase the child tax credit
Explanation of Provision
The Act makes permanent the $1,000 child tax credit. The Act also permanently extends the repeal of a prior-law provision that reduced the refundable child credit by the amount of the AMT. Under the Act, the staff of the Joint Committee on Taxation calculates that in 2013, the earned income threshold for computing the refundable child credit is $13,400.255 Finally, the Act permanently extends the rule that the refundable portion of the child tax credit does not constitute income and shall not be treated as resources for purposes of determining eligibility or the amount or nature of benefits or assistance under any Federal program or any State or local program financed with Federal funds.256
Child Tax Credit
Explanation of Provision
The provision extends the $1,000 child tax credit and allows the child tax credit against the individual’s regular income tax and AMT for two years (through 2012). The provision also extends the EGTRRA repeal of a prior-law provision that reduced the refundable child credit by the amount of the AMT for two years (through 2012). The provision extends the earned income formula for determining the refundable child credit, with the earned income threshold of $3,000 (also, the provision stops indexation for inflation of the $3,000 earnings threshold) for two years (through 2012).1529 Finally, the provision extends the rule that the refundable portion of the child tax credit does not constitute income and shall not be treated as resources for purposes of determining eligibility or the amount or nature of benefits or assistance under any Federal program or any State or local program financed with Federal funds for two years (through 2012).
Child Tax Credit
Explanation of Provision
The provision extends for two years the earned income threshold of $3,000. Also, the provision stops indexation for inflation of the $3,000 earnings threshold for that period.
Increase of refundable portion of the child credit
Explanation of Provision
The provision modifies the earned income formula for the determination of the refundable child credit to apply to 15 percent of earned income in excess of $3,000 for taxable years beginning in 2009 and 2010.
255- This amount is $10,000 indexed for inflation from 2001. See Title I, section C. 2. for additional discussion of the child credit.
-Return to Explanation of Provision
256- See Title I. section C. 4.
-Return to Explanation of Provision
1529- Section 101 of the Act extends the EGTRRA modifications to the provision. Section 103 of the Act extends the modifications to the provision (including reduction in the earnings threshold for the refundable portion of the child tax credit to $3,000). See Title I, section J for additional discussion of the child tax credit, below.
-Return to Explanation of Provision