Can my trustee keep my child tax credit?

[390gt]

When I filled my tax return late last year my attorney told me that the trustee would likely take some or all of my tax return with the exception of my credits. Since I was unemployed for a portion of 2007, my taxable income was quite low so I received an earned income credit as well as the maximum amount of child tax credits (for 3 children). All in all, my return was around $5k with credits accounting for almost $4k. So according to my attorney, I should have been able to keep the $4k since it was credits and not a tax refund. In the statement I received from my trustee, it states that I will only be able to keep my earned income credit and everything else will be kept including the child tax credit. Can someone explain this to me. I don't understand how the trustee can take the child tax credit since it isn't income, but a credit for having low income?

[PoorAnnie]

I found this question during a search because I was wondering about the child tax credit and not the earned income credit EIC (which I have read several places that is exempt from being taken in bk). I haven't been able to find info on the child tax credit. When we talked to our bk atty he asked how much our refund was last yr and we said most all of it was a from EIC but now I went back and looked on the tax papers and it is child tax credit and not EIC which was $0. So now I wonder if we will get none of our money from the taxes coming in Feb when we file. We plan to officialy file bk in Nov 2008 so will they look forward and take the taxes coming even though it will be after the bk is discharged?

[Over our heads]

What our lawyer told us, was that the trustee can take a portion of your taxes. EX: if you file BK in Nov, the trustee would take 11/12's of your coming refund.

Because math isn't my strong suit, if you are getting a 12k refund for the 08 tax year, and you filed in Nov. of 08, the trustee is going to take 11k of that refund.

I didn't think to ask if any of ones refund is protected.

We are hoping that we can hold off filing until after we get our 08 taxes back and safely spent, so that the trustee can't have any of it.

[Grider]

is the taxes being taken after the discharge? what if you file after discharge april 15?

[momof3b1g]

I'd like to know more about what they can take. Last year most of our refund was the additional child tax credit. Is that the part they can't take? We are planning on filing in the next week or 2.

[Flamingo]

When I filled my tax return late last year my attorney told me that the trustee would likely take some or all of my tax return with the exception of my credits. Since I was unemployed for a portion of 2007, my taxable income was quite low so I received an earned income credit as well as the maximum amount of child tax credits (for 3 children). All in all, my return was around $5k with credits accounting for almost $4k. So according to my attorney, I should have been able to keep the $4k since it was credits and not a tax refund. In the statement I received from my trustee, it states that I will only be able to keep my earned income credit and everything else will be kept including the child tax credit. Can someone explain this to me. I don't understand how the trustee can take the child tax credit since it isn't income, but a credit for having low income?

I am responding to your last sentence. If you are referring to the $1,000 credit for each child age 16 and under in the house (the credit stops after the year the child turns 16), that is not a low income tax credit and most people are eligible to receive it as long is the child is age 16 or under and it stops after the year the child turns 16. So, as an example, if your child turns 16 this month you can still claim the credit for 2008 but not for 2009 as your child will turn 17 next December.