January 18, 2006: Child tax credit claimed by debtors on income tax return was included in "property of the estate" in part.
A federal bankruptcy judge in Missouri has held that the refundable portion of the child tax credit claimed by Chapter 7 debtors on their federal income tax return, the "Additional Child Tax Credit," was included in the "property of the estate," as being in the nature of an overpayment of taxes on income earned prepetition. However, the non-refundable portion, the "Child Tax Credit," was not included in the property of the Chapter 7 estate. The issue was one of first impression in the court.
A federal bankruptcy judge in Missouri has held that the refundable portion of the child tax credit claimed by Chapter 7 debtors on their federal income tax return, the "Additional Child Tax Credit," was included in the "property of the estate," as being in the nature of an overpayment of taxes on income earned prepetition. However, the non-refundable portion, the "Child Tax Credit," was not included in the property of the Chapter 7 estate. The issue was one of first impression in the court.
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