The recent American Recovery and Reinvestment Act of 2009 offers an improvement to the Child Tax Credit. The enhancement will allow for many    low-income working families to qualify and possibly increase their tax credit received per child.

Presently a taxpayer will receive a $1000 tax credit for each child under the age of 17. If the tax credit surpasses the tax liability of the taxpayer, then the taxpayer is eligible for a refundable credit. The refundable credit is equal to 15% of the taxpayers earned income in excess of a set threshold. In 2008 the threshold was set for $8,500, requiring a family with one child to earn a minimum of $15,166 to receive the tax credit for both children.

The threshold for 2009 and 2010 has been lowered to $3,000. This makes a big difference allowing families who make less than $8,500 but more than $3,000 to receive at least a partial credit. With the new threshold a family with one child would now only have to earn $9,666 to receive the full credit for the child.

Please remember that this is only a summary of a portion of the American Recovery and Reinvestment Act and for further information please contact us with any questions.