Additional Child Credit - NOL?

[Snaggletooth]

Can "Additional" Child Credit be increased as a result of applying an NOL?

Just going through the forms and instructions, it appears that all payments (including non-refundable credits) are not affected by NOL.

I have a client who has an NOL, and applying the NOL will wipe out his "Child Tax Credit" but if he can recover this in the "Additional" Child Credit, we can apply the NOL for the year in question.

Thanks in advance - Snag

[OtisMozzetti]

nothing in forms, but earned income affected by losses

Mr. Snaggletooth, when I go through the forms including Form 1040, Form 8812, and Publ. 972, there is no step in the computation that is affected by an NOL which is applied on Form 1040 Line 21. However, what does show up is that the worksheet in Publ. 972 for calculating taxable earned income offsets earned income with various types of losses, such as net loss on a Schedule C, from performing personal services. An NOL is not included on that worksheet!

What troubles me is that the NOL might arise from casualty losses, or it might arise from losses occurring in an earned income activity, maybe even from the same Schedule C which had provided earned income during the carryback year. If the taxpayer earned income with a Schedule C business several years in a row, and then has NOL losses from that business to carry back to those years, it sort of sounds like during those years it "ought to be" treated as if there had been a reduced amount of earned income. But following the forms provided by IRS does not result in the earned income going away during the carryback year.

So, in short, I don't know for sure (because of the suspicion explained), but it does seem that following the forms might be a solution.

[Snaggletooth]

Mechanics

Otis, thanks much for the response.

By following the mechanics of the form/instructions for the 1045, it appears
(a)Most Credits (including Child Tax Credit) are reduced or complete wiped out because there is no tax liability remaining to support them.
(b)Payments are not affected. This means that EIC doesn't change (if it did, it could go in either direction as earned income is reduced). Also looks like Additional Child Credit does not change -- hence my question.

Additional Child Credit serves as a safety net to give some taxpayers a second chance. Taxpayers who "lose" their child tax credit because of their tax liability will not support a credit can have a shot at getting a refundable credit which requires no tax liability. The proverbial "free money."

But it's looking more and more like NONE of the refundable credits are affected by the NOL.

[Davc]

[QUOTE=Snaggletooth;84694
(b)Payments are not affected. This means that EIC doesn't change (if it did, it could go in either direction as earned income is reduced)..[/QUOTE]

An NOL doesn't affect earned income in a carry back year.