Let your kids treat you by giving you the tax break you deserve.
Typically, for the prior tax years, (including the tax year 2017) you can receive up to $1,000 per qualifying child for the Child Tax Credit (CTC). You may even get the Additional Child Tax Credit (ACTC) which is a refundable credit that you may receive if your CTC exceeds the total amount of income taxes you owe. However, you need an income of at least $3,000. It phases out for taxpayers with the AGI of $75,000 or greater and $110,000 for joint filers.
The good news is that the CTC and the ACTC increases for the next tax year.
Read on to find out the changes for 2018.
What are the changes for the Child Tax Credit and Additional Child Tax Credit?
The maximum of the CTC for 2018 increases to $2,000 per qualifying child and $1,400 for the ACTC. You need an income of at least $2,500 to qualify. On top of that, the credit now phases out at the income threshold of $200,000 and $400,000 for taxpayers who are married filing jointly.
Click here to find out more on your eligibility for the CTC and ACTC.
As a reminder, a qualifying child must be:
- Age 16 or younger on December 31 of the tax year
- A United States citizen, a United States national, or a resident alien
- A dependent on your tax return
- MUST be related to you such as a son, daughter, stepson, stepdaughter, brother, sister, stepbrother, stepsister, grandchild, niece, nephew, legally adopted child and legal foster child
- MUST have lived with you for more than half of the year or at least 183 nights
- Did NOT provide more than half of his/her own financial support
The IRS gives you leeway for dependents who do not qualify.
This means that you can receive a new credit of up to $500 for each dependent who does not qualify for the CTC. Similarly, the credit phase-out income threshold increases to $200,000 as well as $400,000 for joint filers.
Your child requires a social security number (SSN) for the CTC.
You should have an SSN valid for employment for your qualifying child before the original or extension due date of your 2018 tax return. On the other hand, if your child has an ITIN issued before the due date of your 2018 return, you may be able to claim the other dependents credit that the IRS has put into effect.
These are the changes for the 2018 tax year.
If you haven’t started on your 2018 tax return yet, click here to start now. We’re here to make filing your tax return easy for you.
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