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Only those families that make less than $110,000 annually are eligible for the full credit. Families making between $110,00 and $130,000 receive a reduced credit (specifically $50 per $1,000 made over $110,000). Individuals who are unmarried must have earned under $75,000 to qualify for this credit. Taxpayers who are married but filing separate returns must have made no more than $55,000.

A qualifying child for purposes of the child tax credit is a child who is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your grandchild, niece, or nephew) and
was under age 17 at the end of the current year,
Did not provide over half of his or her own support for the current year,
Lived with you for more than half of the current year
Is claimed as a dependent on your return,
Does not file a joint return for the year
Was a U.S. citizen, a U.S. national, or a U.S. resident alien.

Contributions designated under section 414(h)(2) are treated as employer contributions and as such they are not voluntary contributions made by the employee. They do not qualify for the credit and should not be included on Form 8880, line 2.

You cannot take the credit if you are a student. You were a student if during any part of 5 calendar months of the current year you Were enrolled as a full-time student at a school, or Took a full-time, on-farm training course given by a school or a state, county, or local government agency. A school includes technical, trade, and mechanical schools. It does not include on-the-job training courses, correspondence schools, or schools offering courses only through the Internet.

You cannot claim the credit if the person(s) who made the qualified contribution or elective deferral (a) was born after January 1, 1994, (b) is claimed as a dependent on someone else’s 2011 tax return, or (c) was a student.

You are not eligible for the credit if your adjusted gross income exceeds a certain amount. You cannot take the credit if either of the following applies: The amount of AGI on Form 1040, line 38 ; Form 1040A, line 22; or Form 1040NR, line 37, is more than $28,250 ($42,375 if head of household; $56,500 if married filing jointly).

If you made (a) contributions (other than rollover contributions) to a traditional or Roth IRA, (b) elective deferrals to a 401(k), 403(b), governmental 457, SEP, or SIMPLE plan, (c) voluntary employee contributions to a qualified retirement plan as defined in section 4974(c) (including the federal Thrift Savings Plan), or (d) contributions to a 501(c)(18)(D) plan, you may qualify for the credit.
You are not eligible for the credit if your adjusted gross income exceeds a certain amount.

If you cannot use all of the credit because of the tax liability limit you can carry the unused portion of the credit to the following year. File form 5695 even if you cannot use any of your credit in the current year.

Simply stated, an S Corporation is taxed in the same manner as a partnership and is not taxed at the federal level. The income or losses and expenses flow through to the shareholders. A "C" Corporation pays tax on its profits and when the owner shareholders take profits from the corporation, the distributions take the form of taxable dividends. In effect, this is a double taxation of profits. There are advantages and disadvantages to both S Corporations and Regular C Corporations. Speak to your local CPA about the tax strategies of selecting the type of entity for your business.

A limited liability corporation offers limited liability to its owners, but may elect to be taxed as a partnership which passes all the income and losses through to its owners. A C corporation is taxed at the federal level and profits are either retained by the corporation or distributed to the shareholders. A profit distribution is called issuing a dividend. These profits are then taxed as income in the shareholders personal taxes. With a LLC, the owner has options of how to be taxed. The IRS allows 3 choices. A Corporation tax like a general C corporation, Partnership taxation like a S corporation or as a Sole Proprietorship.