Tax Reform And The Child Tax Credit

Tax Reform And The Child Tax Credit

The Child Tax Credit (CTC) has been a valuable tax credit that families have been using for years. Now, with the passage of the Tax Cuts and Jobs Act, the Child Tax Credit has become even more important as the amount of money this tax credit can save you has gone up.

For the 2017 tax year, the Child Tax Credit might reduce your federal income taxes by up to $1,000 for each child you have that’s younger than 17 years old. This tax credit is subject to income limitation; meaning that if your modified adjusted gross income surpasses $400,000 then you might be unable to take advantage of it (this figure is lower for single and for married couples that file separately). For the majority of Americans, the Child Tax Credit applies to them and their households (if they have children).

When you file your 2018 returns, the Child Tax Credit will be greatly increased. Under the old system, the credit was only $1,000 per child, that number now has gone up to $2,000 per child that’s younger than 17 years old. Furthermore, the Child Tax Credit won’t start to phase out until your modified adjusted gross income exceeds $400,000 for married couples and $200,000 for other filers: meaning that those figures have jumped up from $110,000 and $75,000 respectively.

There are a few limitations that apply to the Child Tax Credit including the fact that the child must be a citizen of the United States, resident alien or national, and a dependent claimed by their parents. Grandchildren, nephews, and nieces can also qualify for the credit (depending upon certain circumstances).

The professional team at the Tax Defense Group has more than 50 years of combined experience in dealing with filing our clients’ taxes and resolving their tax issues. We’ve helped families from all walks of life and we do this by getting to know them, and by doing our homework by looking at every aspect of their financial situation and by acting accordingly. Once we’re on the same page, we’ll present your options to you. The Tax Defense Group will even handle correspondences with the IRS on your behalf (if that service is needed).

Whether you owe money to the IRS or you have a State tax debt, our staff of Enrolled Agents and Tax Attorneys can help. We have experience negotiating with the IRS in all 50 States.