What is the child tax credit? Answer: The child tax credit is a per-child tax credit against your personal income tax liability. The child tax credit is $1,000 per child in tax years 2003 and 2004. If you have a qualifying child under the age of 17, you may be entitled to claim the child tax credit. A qualifying child is typically a child, grandchild, stepchild, or foster child under the age of 17 who is a U.S. citizen or resident and is claimed by you as a dependent. The child tax credit begins to phase out if your modified adjusted gross income (MAGI) exceeds a certain level ($110,000 for married persons filing jointly, $55,000 for married persons filing separately, and $75,000 for heads of household, widow(er)s, and single persons). The credit is reduced by $50 for each $1,000 that your MAGI exceeds the above amounts. To claim the child tax credit, you must file either federal Form 1040 or 1040A. The credit is refundable, so you may be able to obtain a refund even if the credit exceeds your regular or alternative minimum tax (AMT) liability. In 2004, the credit is refundable to the extent of 10 percent of your earned income in excess of $10,750 up to the per-child credit amount. Special rules may apply if you have three or more qualifying children and are eligible for the earned income credit (EIC)--the child tax credit will be refundable under the prior law rules or the new law rules, whichever produces the greater credit. More specifically, parents with three or more children will be allowed a refundable credit for the amount by which their Social Security taxes exceed their EIC (as under prior law) if that amount is greater than the refundable credit based on the parents' earned income. The law also protects the child tax credit from being reduced by the AMT.