Number: RL34715
Title: The Child Tax Credit
Authors: Maxim Shvedov, Government and Finance Division 
Abstract: The child tax credit was enacted in 1997, as Congress addressed concerns that the income tax structure did not adequately reflect a family's reduced ability to pay taxes as family size increased. Initially, for tax year 1998, families with qualifying children under the age of 17 were allowed a credit against their federal income tax of $400 for each qualifying child. For tax years after 1998, the credit increased to $500 per qualifying child. For families with three or more children, the child tax credit was refundable. Subsequent changes in 2001, 2003, and 2004 increased the amount of the child tax credit and made it refundable for most families. These changes are to sunset (expire) in 2011. The maximum amount of the child tax credit is scheduled to decline from $1,000 per qualified child in 2010 to $500 in 2011. The Emergency Economic Stabilization Act of 2008 (P.L. 110-343), signed into law on October 3, 2008, expanded eligibility for the refundable portion of the credit for low-income families and increased the refundable amounts. This change is effective only for the 2008 taxable year.
Pages: 8
Date: October 21, 2008