Updates To The Child Tax Credit

Updates To The Child Tax Credit

The Tax Cuts and Jobs Act that passed in December 2017 cut dependency exemptions and enhanced child tax credits beginning in 2018.

The enhancements start with a broadened pool of eligible taxpayers. In prior years, a taxpayer’s credit amount began to phase out at $110,000 Beginning January 1, 2018, the credit begins to phase out at $400,000 for married filing jointly and $200,000 for married filing separately which significantly increases the amount of eligible taxpayers.

Another change is to the actual credit amount. The amount has been doubled from $1,000 to $2,000 per qualifying child and is not adjusted for inflation.

The refundable portion of the credit is $1400 per qualifying child. A qualifying child is a child who is under the age of 18 at year-end.

The changes go in-depth as to what qualifies a child for the credit amount, as well as how other dependents are covered.

To learn more about the changes and how they might affect you, please give us a call at (859) 331-1717.