The Child Tax Credit 2020 is Worth Double

child tax credit answers

The child tax credit is one of the most common types of tax credits around for American families. But the credit has changed because of the recent Tax Cuts and Jobs Act (TCJA). These changes apply for 2018 and future years, so you need to be aware of the changes.

The Credit Amount

 The law has doubled the value of the child tax credit to $2,000. However, the eligibility criteria haven’t changed, so if you’ve claimed this credit before you could get a bigger refund this tax season.

If you claim a child that’s younger than 17 at the end of this tax year on your tax return, and that child lives with you for at least six months of the year, you can claim the tax credit.

Refundable Credit

 The child tax credit is refundable up to a maximum of $1,400. The maximum amount you can receive as part of a tax refund is $1,400.

Threshold for Earned Income

 The amount of earned income a family must earn to claim the credit has been lowered. Your family only needs to earn $2,500 to be eligible to file for this refundable credit.

When Does it Phaseout?

 The phaseout limit for the child tax credit has been increased to $200,000 for single taxpayers and $400,000 for married taxpayers filing jointly.

Most American families will be able to claim the full value of the credit.

What about Other Dependents?

child tax credit calculator

If you have other dependents in your household then there’s a new credit for claiming these dependents. The new credit is non-refundable and provides $500 per qualifying person.

The child tax credit estimator will show you how much you can get for your dependents.

These dependents can also be children who no longer qualify for the child tax credit listed above. It may also include elderly parents or other relatives living in your home.

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