If you’re a working parent, then you understand the importance of tax credits and what they mean for your monthly budget. The child tax credit is an important part of the tax code which allows parents or guardians to reduce their taxes by up to $1,000 for each qualifying child under the age of 17.
What is the Child Tax Credit
The Child Tax Credit (CTC) is a federal tax credit that provides a dollar-for-dollar reduction in the tax liability of qualifying children. Families who have children under the age of 17 can receive a maximum credit of $2,000 per child. The CTC has been in effect since 1997 and has helped millions of families reduce their tax bills. Here are some things to expect with the CTC in 2019:
1. The 2019 CTC is worth more than ever before.
This year, the CTC is worth $2,000 per qualifying child. That’s up from $1,000 per qualifying child in 2018 and $1,600 per qualifying child in 2017. The bonus will continue to grow over time, reaching its highest value of $2,500 per eligible child in 2026. child tax credit changes
2. The CTC is available even if you don’t have children living with you full-time.
Qualifying children don’t have to live with their parents to qualify for the CTC – they can be living with you part-time or full-time and still receive the credit.
How does the Child Tax Credit work?
The Child Tax Credit (CTC) is a tax credit that provides a dollar-for-dollar reduction in taxes payable by dependents age 17 and under. The CTC is available to both parents, and can be claimed by children who are legally dependent on their parents for support. To qualify, the child must also be a U.S. citizen, resident alien, or refugee.
There are several changes that you may expect to see with the CTC as of 2018. First, the amount of the CTC has been increased from $1000 to $2000 per qualifying child. Additionally, the phase-out threshold for the CTC has been increased from $110,000 to $130,000 for Married Filing Jointly (MFJ) taxpayers and from $150,000 to $160,000 for Single Filing Jointly (SFJ) taxpayers. Finally, the CTC will no longer be refundableable beginning in 2018. nationaltaxreports.com
If you have any questions about how the Child Tax Credit works or how it might impact your personal tax situation, please contact one of our professional tax advisors at Ernst & Young LLP. We would be happy to provide you with more information about this important
What changes to Expect?
The Child Tax Credit, or CTC, is a federal tax credit offered to parents of children under the age of 18. The credit can be as high as $2,000 per child. This credit is available to both married and unmarried couples, and is generally refundable.
The CTC has been modified several times over the years, most recently in 2013. Some of the changes that you may expect with the CTC include:
-Maximum credit amount increased to $3,000 per child
-Eligibility changed so that dependents who are not qualifying children can also qualify
-Refundability eliminated for some taxpayers
-CTC no longer reduces taxes owed on income above certain thresholds
If you are considering filing your taxes this year, it is important to review the changes that have been made to the CTC. You may be able to qualify for a larger credit than you were previously expecting.
How do you claim the Child Tax Credit?
The Child Tax Credit is a federal tax credit available to parents who have children under the age of 17. The credit can reduce your taxable income and may provide a refund. To claim the credit, you must file a tax return, and use Form 1040, Schedule A or B. You can claim the credit for the year you paid your child’s tuition, fees, or other expenses related to attending school. You can also claim the credit if your child was permanently and totally disabled as of December 31 of the year you filed your tax return.
Conclusion
The Child Tax Credit (CTC) is a Federal tax credit that can help parents pay for their children’s expenses. The CTC provides a $2,000 per child tax credit, which can be used to pay for tuition and fees, school supplies, or other related costs. There are some important changes that you should expect to see with the 2017–18 tax year, including an increase in the maximum income level at which the CTC begins to phase out and an expansion of eligibility criteria.