Get Publication 1948 (november 1996). Important 1996 Tax Information-please Keep

Federal Child Tax Credit It was established as a part of the 1997 Taxpayer Relief Act. Eligible recipients subtract the credit amount from their owed federal income taxes. Originally, the tax credit was $400 per child younger than age 17 and nonrefundable for most families.

Taxpayer Relief Act of 1997 The Act introduced a $400 child tax credit for each child under age 17 and the credit was increased to $500 in 1999. The purpose of the child tax credit was to reduce the tax burden of families raising dependent children.

Middle-income households received almost all of the benefits. The credit increased to $500 per child in 1999, and then by 2004 it grew to $1,000 per child as a result of legislation passed in 2001.

The amount of the credit for 1996 is more than in 1995. The most credit you can receive in 1996 is: $2,152 with one qualifying child, ● $3,556 with more than one qualifying child, or ● $323 without a qualifying child.

Employee Compensation Generally, you must include in gross income everything you receive in payment for personal services. In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options.

Origins. The child tax credit was created in 1997 as part of the Taxpayer Relief Act of 1997. Initially it was a $500-per-child (up to age 16) nonrefundable credit intended to provide tax relief to middle- and upper-middle-income families.