• A different set of tax laws pertains to children and their parents.tax forms image by Chad McDermott from Fotolia.com
  
  If you're a parent filing taxes or a parent helping a dependent file taxes, your family may be eligible for credits--and additional regulation--when it comes time to report to the IRS. For many families, that can mean a significant credit, although many of the child-related tax credits' benefits are geared toward lower- and middle-income families.
  
  

Child Tax Credit

• Families with dependent children may be eligible to receive a tax credit. To qualify for the credit, each child must be less than 17 years old, must be a biological, step, or adoptive child to the person claiming the credit, must be claimed as a dependent, and must be citizens of the United States, a U.S. national or a naturalized resident. In addition to those requirements, qualifying children must provide less than half of their own support and live with the parent claiming the credit more than half the year.
  
  

Limitations of the Child Tax Credit

• Full benefits of the child tax credit are only available to families who earn less than $110,000 each year. After that, the credit is steeply graduated so that families who earn $130,000 or more a year don't qualify. The maximum amount of the child tax credit varies by each year's tax laws, it is $1,000 per child as of 2010.
  
  

Additional Child Tax Credit

• Child tax credits are refundable, so if child tax credits surpass the amount of income tax a family owes, families may receive the balance in the form of a tax refund. Although not many filers qualify for this refund, it's intended to provide relief to large, low-income families beyond tax credits.
  
  

The "Kiddie Tax"

• Well-heeled families once deferred some of their tax burden by placing investments under the children's names. Because children and dependents are taxed at a significantly reduced rate than that of adults, it provided a means to avoid paying the full tax on investment income. In the 1980s, the loophole was amended with the introduction of the "kiddie tax." By 2009, anyone up to the age of 18 (24 if he is a student) with investment income above a threshold is taxed at the same rate as his parents. The child's dividends and interest earnings may either be reported on his parents' return or through a calculation on IRS form 8015 attached to the child's return.