The Internal Revenue Service has a Child Tax Credit of up to $1,000 for each qualifying child. However, you can't claim more than the amount of your tax liability. This means some taxpayers who are eligible cannot claim the credit or get a partial amount. The Additional Child Tax Credit allows these people to receive the portion of the CTC they would otherwise lose because they don't owe enough taxes.
How the ACTC Works
Suppose you calculate your taxes and find that you owe $600 before subtracting taxes already paid and tax credits. You qualify for a $1,000 Child Tax Credit, but because your tax liability is only $600, that's all you can claim. As long as you have at least $3,000 in earned income, you can use the Additional Child Tax Credit to get the remaining $400.
General ACTC Qualifying Rules
A qualifying child for the Child and Additional Child Tax Credits has to be under age 17 at year's end. She must be your child, stepchild, foster child or a sibling that you claim as a dependent. Descendants of any of these children are also eligible. Among the other eligibility requirements are that the child must live with you more than 50 percent of the year, provide no more than half of her own support and not be claimed as a dependent by another taxpayer. Additional eligibility requirements can be found in IRS Publication 17 for the 2014 tax year. The credits are available only if your modified adjusted gross income is under $110,000 for couples filing a joint return. For a married person filing separately, the limit is $55,000 and for single filers, the limit is $75,000.