4. Child Tax Credit revised
For 2009, the Child Tax Credit is worth $1,000 for each qualifying child who is under 17 at the end of 2009 and who qualifies as a dependent. The Child Tax Credit can be taken in addition to the child's dependency exemption.
That means if you have three children, the child credit can potentially reduce your tax bill by $3,000. The $1,000 credit remains in effect through 2010, when it will decrease to $500 per qualifying child.
For 2009, the child credit begins to phase out when modified adjusted gross income (AGI) exceeds $110,000 for married couples filing jointly, $55,000 for married taxpayers filing separately, and $75,000 for single filers, heads of households, and qualified widows. The credit is reduced by $50 for each $1,000, or fraction thereof, of modified AGI above these thresholds.