Child Tax Credit for 2018

As the Tax Cuts and Jobs Act has been implemented in 2018, tax reform has made some taxpayer-friendly changes to the Child Tax Credit. The credit taxpayers receive has doubled from $1,000 to $2,000. The Child Tax Credit has higher income limits allowing more taxpayers to claim it. The refundable portion of the credit has also increased. With tax reform, the credit also includes a new “family credit” that allows you to claim an additional $500 credit for dependents that don’t meet the qualifying child requirement.

In 2018, the Child Tax Credit doubles to $2,000 per qualifying child. Taxpayers can receive this credit for each qualifying child under the age of 17. A qualifying child includes a taxpayer’s child or a descendant of the child, or sibling or stepsibling or a descendant of those two. The child must live in the home of the taxpayer for more than half the year and the taxpayer must provide more than half of the support for the child.

The income limits have been raised significantly. A taxpayer’s potential credit will begin to phase out at $400,000 Modified Adjusted Gross Income for Married Filing Joint filers and $200,000 for any other filer. Of the $2,000 credit per qualifying child, up to $1,400 can be refundable which means it can increase your refund and not just decrease your tax liability to zero. However, the $500 “family credit” is not refundable.

The Child Tax Credit changes for 2018 are beneficial to the taxpayer and should be a great tax saver at tax time! Give us a call at 260-407-5000 and we would happy to answer any other questions you have on this subject or any other tax matter.

Tanner Roberson


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