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Did the TCJA Impact the Child Tax Credit?

September 17, 2018

If you had children under 17 years of age in 2017, you’ll be able to deduct $1,000 per child on your tax return. This increases to $2,000 in 2018 thanks to a provision in the Tax Cuts and Jobs Act.

Did the child tax credit survive tax reform? Yes, and it’s become more beneficial under the Tax Cuts and Jobs Act in fact. Learn more about how your family can benefit from this credit.

First of all- what exactly is the child tax credit?

If you have children under age 17 at the end of the calendar year, you can get a tax credit of up to $1,000 per dependent child ($2,000 in 2018) on your return, in addition to the exemption deductions you take for dependent children.

Child tax credit before and after TCJA

Pre-Act LawUnder TCJA 2018-2025
Child Tax Credit Increased $1,000 per child $2,000 per child
Credit for non-child dependents $0 $500
Phase-out AGI threshold $75,000 single/Head of Household $200,000 single/HOH
$110,000 MFJ $400,000 MFJ

Note that not only did the value of the credit increase, but also the income thresholds at which the credit phases out expanded. That means many more people will get the benefit of the credit in 2018.

Can you claim the credit for dependent adults?

Yes. If you are the caregiver for an ailing parent, or an adult child, you can claim a $500 credit for them. As long as the older dependent does not provide more than half of their own support.

Remember, these changes apply to next tax season. Use pre-act law to file your 1040s for the 2017 tax year. View our recent webinar for more clarifications on the changes to 2018 taxes here: “The Impact of Tax Reform on Businesses and Individuals.” Questions on the child tax credit? Contact us today.

For more tax reform updates, be sure to visit our Tax Reform Center- your “one stop shop” for all things Tax Cuts and Jobs Act (TCJA) related.

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