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§ 24. Child tax credit
(a)
Allowance of credit
There shall be allowed as a credit against the tax imposed by this chapter for the taxable year with respect to each qualifying child of the taxpayer an amount equal to $1,000.
(b)
Limitations
(1)
Limitation based on adjusted gross income
The amount of the credit allowable under subsection (a) shall be reduced (but not below zero) by $50 for each $1,000 (or fraction thereof) by which the taxpayer’s modified adjusted gross income exceeds the threshold amount. For purposes of the preceding sentence, the term “modified adjusted gross income” means adjusted gross income increased by any amount excluded from gross income under section
911,
931, or
933.
(2)
Threshold amount
For purposes of paragraph (1), the term “threshold amount” means—
For purposes of this paragraph, marital status shall be determined under section
7703.
(3)
Limitation based on amount of tax
In the case of a taxable year to which section
26
(a)(2) does not apply, the credit allowed under subsection (a) for any taxable year shall not exceed the excess of—
(d)
Portion of credit refundable
(1)
In general
The aggregate credits allowed to a taxpayer under subpart C shall be increased by the lesser of—
(A)
the credit which would be allowed under this section without regard to this subsection and the limitation under section
26
(a)(2) or subsection (b)(3), as the case may be, or
(B)
the amount by which the aggregate amount of credits allowed by this subpart (determined without regard to this subsection) would increase if the limitation imposed by section
26
(a)(2) or subsection (b)(3), as the case may be, were increased by the greater of—
(i)
15 percent of so much of the taxpayer’s earned income (within the meaning of section
32) which is taken into account in computing taxable income for the taxable year as exceeds $10,000, or
(ii)
in the case of a taxpayer with 3 or more qualifying children, the excess (if any) of—
The amount of the credit allowed under this subsection shall not be treated as a credit allowed under this subpart and shall reduce the amount of credit otherwise allowable under subsection (a) without regard to section
26
(a)(2) or subsection (b)(3), as the case may be. For purposes of subparagraph (B), any amount excluded from gross income by reason of section
112 shall be treated as earned income which is taken into account in computing taxable income for the taxable year.
(2)
Social security taxes
For purposes of paragraph (1)—
(A)
In general
The term “social security taxes” means, with respect to any taxpayer for any taxable year—
(i)
the amount of the taxes imposed by sections
3101 and
3201
(a) on amounts received by the taxpayer during the calendar year in which the taxable year begins,
(ii)
50 percent of the taxes imposed by section
1401 on the self-employment income of the taxpayer for the taxable year, and
(3)
Inflation adjustment
In the case of any taxable year beginning in a calendar year after 2001, the $10,000 amount contained in paragraph (1)(B) shall be increased by an amount equal to—
(B)
the cost-of-living adjustment determined under section
1
(f)(3) for the calendar year in which the taxable year begins, determined by substituting “calendar year 2000” for “calendar year 1992” in subparagraph (B) thereof.
Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $50.
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