snax, if the child tax credit is preventing you from claiming the hybrid tax credit, don't claim the child tax credit. The IRS does not say that you have to claim it. If you want both, that puts the gov't paying you, which is dumb, but if you don't take the child tax credit (or some other deduction or credit) so that you can take the hybrid credit, it will drop your tax even lower.

Sorry, but I'm still not clear on your situation snax, I see your taxable income is $14297 and assume your base tax liability is then $1429.70, but you have child tax credits that take you to zero tax, is that correct?

How much I made or what my specific tax liability is really isn't relevant. What IS relevant is that the hybrid tax credit is conditional in a way that was not made publicly available by the IRS before the end of the tax year.

Cite WHERE on the IRS website it referred to the order in which tax credits would be applied with respect to the hybrid tax credit. I guarantee it's not easy to find. I haven't found it yet.

In this respect it was misrepresented by omission.

LiberalImage.com

Everyone is making this to hard. this is very simple and it applies to ALL credits and has applied to ALL credits for a LONG time. There is nothing special being done just for the "Hybrid Credit".

This is really simple. All credits are applied to your tax liability and reduce that liability by the amount of the credit.
Now our great tax system () also has this thing known as AMT, which is meant to insure that all tax payers pay a minimum amount of tax based upon their earnings. It is mean to keep certain tax payers from using excessive tax credits and shelters to keep them from paying any tax. While the intent of AMT is honorable, the codes have not been modified in years and as a result AMT no longer just affects the wealthy, but has been pushed down into lower tax brackets.

That said, If your credits that are applied to your liability, reduce that liability below your liability calculated through AMT then you will owe the AMT amount. If it does not then you will owe the standard liability.

In addition if the credit reduces your liability below zero, then you will lose it. The government is not going to send you a check when you tax liability is zero.

Now I will agree that how your AMT liability is calculated can be rather confusing. This is why I don't do my own taxes. But the principal behind how a tax credit is applied is the SAME this year as it has been EVERY year since I can remember paying taxes.

No one has misrepresented the tax credit. It is simply the fact that most people have not been hit with AMT before. There are many people out there who will face this same issue with the child credit this year who did not by a Hybrid, and I am sure many of them are saying the same thing. "Child Tax Credit My Shinny Metal ***!"

http://www.irs.gov/businesses/small/...150703,00.html
http://www.irs.gov/taxtopics/tc556.html

The issue isn't that this information was available, it is that people didn't know to look for it, because most tax payers are unaware that AMT even exists until they get hit with it.

Maybe this will help clarify things further. The way our tax credit system is currently setup, if a person's tax liability is zero after deductions, the child tax credit can and does provide a payout beyond the amount of tax paid. In our situation, that means if our deductions or other credits reduce our tax to zero, the child tax credit can conceivably offer up to $3000, in addition to what we paid, back to us.

Now if our hybrid tax credit were deducted from our liability before the child tax credit is applied, it would take our liability to zero, and we would then receive the full child tax credit. As it is however, they decided that the child tax credit must be applied first, taking us past the zero point, wiping out the hybrid tax credit, and reducing the amount we are able to receive by the difference of that amount and full child tax credit.

So yes, the federal government DOES send out a check to the maximum of the child tax credit when a person's tax liability is zero.

LiberalImage.com

But the Hybrid Credit is no different than any of the other credits that fall after the Child Tax Credit, the government is playing a bait and switch on all of these credits too.

Mortgage interest credit
Adoption Credit
District of Columbia First-Time Homebuyers credit
Credit for prior year minimum tax
Qualified Electrical Vehicle Credit
General Business Credit
Employment Zone and renewable community credit
Credit for alcohol use fuel
Renewable electricity, refined coal, and Indian coal production credit for electricity and refined coal produced at facilities placed in service after October 22, 2004, and Indian coal produced at facilities placed in service after August 8, 2005. That's a mouthful
New York Liberty Zone business employee credit
Qualified zone academy bond credit
Clean renewable energy bond credit
Credit for Gulf tax credit bonds
Alternative motor Vehicle credit
Alternative fuel vehicle refueling property credit

I'll be paying over $8000 this year, someone has to cover for all the families with 2+ kids and huge mortgages.

If I understand right a IRA contribution comes before the Child Tax Credit, can't you use that to max out your Child Tax Credit?

I see what you mean now about the "Additional Child Tax Credit" that may allow actual payout. I looked at form 8812 trying to figure out the limitations on getting money if your tax is zero. I didn't get a clear picture of who was eligible for this.