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Child Support Enforcement (CSE)

Services: Child Support Guidelines Frequently Asked Questions

Child Support Guidelines, N.D. Admin. Code §§ 75-02-04.1-01(5)(b) and 75-02-04.1-01(7)(a)(4): Treatment of Additional Child Tax Credit and "Regular" Child Tax Credit (IC-CO-04-02)

Child Support Enforcement Agency
P.O. Box 7190
Bismarck, ND 58507-7190

IV-D Informational Communication
IC-CO-04-02
July 7, 2004

TO: Administrators, Regional Child Support Enforcement Units

RE: Child Support Guidelines, N.D. Admin. Code
§§ 75-02-04.1-01(5)(b) and 75-02-04.1-01(7)(a)(4): Treatment of Additional Child Tax Credit and "Regular" Child Tax Credit

When applying North Dakota's child support guidelines to determine an obligor's gross and net incomes, the question has arisen regarding the treatment of the additional child tax credit and the "regular" child tax credit. The following information regarding N.D. Admin. Code §§ 75-02-04.1-01(5)(b) and 75-02-04.01-01(7)(a)(4) is intended to provide an answer to that question.

Question: When determining an obligor's gross and net incomes, how should the additional child tax credit and the "regular" child tax credit be treated?

Answer: The additional child tax credit is treated as gross income to the obligor. The "regular" child tax credit is used in the determination of the obligor's deduction for the hypothetical federal income tax obligation.

By way of background, a tax credit is a credit against income tax itself as distinguished from a deduction which applies only to reduce the taxpayer's income. Certain tax credits are refundable which means that the taxpayer may receive a refund even if he or she does not owe any tax. Further discussion of tax credits is beyond the scope of this response.

For illustration purposes, the additional child tax credit is the amount reflected on line 65 of the Internal Revenue Service 1040 form for 2003. The additional child tax credit is an example of a refundable tax credit. It must be included in the obligor's gross income in accordance with N.D. Admin. Code § 75-02-04.1-01(5)(b).

For illustration purposes, the "regular" child tax credit is the amount reflected on line 49 of the Internal Revenue Service 1040 form for 2003. The "regular" child tax credit is used to determine the obligor's deduction from gross income for the hypothetical federal income tax obligation in arriving at net income in accordance with N.D. Admin. Code § 75-02-04.1-01(7)(a). (The application of the "regular" child tax credit is specifically addressed in N.D. Admin. Code § 75-02-04.1-01(7)(a)(4).)

Reference: Minutes of the Department of Human Services Child Support Guidelines Drafting Advisory Committee, June 6, 2002.

Inquiries to: Child Support Enforcement Agency
P.O. Box 7190
Bismarck, ND 58507-7190
Telephone (701) 328-3582

 

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