Child Tax Credit
A term to know.
The Child Tax Credit was created in 1997 by the Taxpayer Relief Act of 1997 to help ease the financial burden that families incur when they have children. Generally, the CTC allows a taxpayer to reduce their federal income tax liability (the taxes owed before tax credits are applied) by up to $1,000 per child. However, since the Child Tax Credit is non-refundable, it cannot reduce taxes below $0. The CTC does include the "additional child tax credit," which allows for a tax refund to the extent of the unused portion of the CTC.