The tax legislation from late 2017 made many changes to U.S. tax law. This includes changes to the child tax credit. These changes apply to tax year 2018, so they will be a factor next filing season.
This tax credit is one that families can typically claim for dependent children under 17 who lived with them for at least half of the year. So, it is a credit many families may look into. Today, we’ll go over some of the key changes that the 2017 tax legislation made to this credit.
For one, the maximum amount of the credit has been increased. It used to be $1,000 per qualifying dependent child. Now, it is $2,000 per child.
Also, the income range that qualifies for the full credit has been expanded. For one, the income threshold that triggers a credit phaseout was raised to $200,000 for single taxpayers and $400,000 for those married filing jointly.
Additionally, this tax credit is now refundable up to $1,400. This means that, if the credit exceeds a person’s tax liability, he or she can receive a tax refund for it, up to $1,400.
When claiming the child tax credit or any other tax credit, it is important for individuals to make sure they comply with the eligibility rules. Being accused of claiming a tax credit one doesn’t qualify for can land a person in impactful disputes with IRS.
When new tax laws come into effect, there can be the potential for uncertainty to arise in connection to how the new laws will be applied and the potential for taxpayers to inadvertently fall into mistakes. When such uncertainty or mistakes lead to taxpayers facing problems with the IRS, they may want to promptly seek out a skilled tax lawyer’s help with addressing the situation.