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How the Child Tax Credit Could Save Your Income Taxes

The child tax credit changes have been adjusted for the 2018 tax year. Previously, families with more than three children qualified for a higher child tax credit. Now, there is an income limit on who can qualify which may affect your child’s eligibility depending on how much you make. Read on to learn about these changes and see if they apply to your family!

We now have a new federal tax plan, and one of the most significant advantages of the Trump Tax changes is that the child tax credit has been upgraded from a non-refundable credit to a refundable credit worth up to $1400.

The child tax credit changes, which provides a $1,000 tax credit per qualifying child under the age of 17, is worth noting. This credit is significant since it offers many American families the opportunity to claim the child tax credit and put money back in their pockets. There have been changes to both the qualifications and credit amounts for filers, as well as significant updates about how filing taxes can affect your personal financial situation.

The new child tax credit modifications go into effect for your current taxes right away. The child must not have been older than 17 at the end of the filing year in order to be eligible for the credit. With the fresh kid tax adjustments, you may take advantage of expanded eligibility conditions, and the credit amount per kid has now doubled!

The child tax credit is a non-refundable credit, so it will only reduce the amount of taxes you owe. You can use your child as a dependent on your federal tax return and still claim them as an exemption if they were less than 17 years old at year end and live with you for more than half the year.

You may qualify for $1400 per child to be put towards your yearly income in addition to other deductions such as medical expenses or charitable contributions. In order to claim this subsidy, however, there are several requirements that must be met by parents:

When filing taxes, keep in mind that all qualifying children who meet these rules will need their taxpayer identification number (social security number) included on their returns either as a child or dependent. This can affect dependents who are not children, like college students living away from home; as well you must meet the minimum income levels in order to be able to claim this credit for your child.

The child tax credit is an improvement over previous years and has allowed many families with young children more relief when filing their year-end taxes. If you have any questions about the new kid tax changes, please feel free to contact our office today!

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