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Do you have children or dependents? Do you make above average income and cannot take the tax credit from prior years? If you answered “yes” to both questions, then I got great news for you. With the recently passed new tax law, you might be able to take advantage of the new and improved 2018 child tax credit.
Hello, this is Noel Dalmacio, your ultimate CPA at LowerMyTaxNow.
Here are three things you need to know about the new 2018 child tax credit:
Tax credit is doubled
- Credit went up from $1,000 to $2,000 per kid.
- Your kid must be under 17 at the end of the year to claim the credit.
Income range huge increase
- This credit will now be available to more taxpayers, because of the massive increase in the income range. Here's a quick guide:
Married filing jointly - $400K - $440K
Other filers - $200K - $240K
- So if your income is below the limit, you can take the full credit. But if it falls between the income range, then you can only make claim a partial credit. But if your income exceeded the limit, you cannot take the credit.
Other dependents’ credit
- They also passed a nonrefundable $500 "family credit" for other dependents. Examples are your aging parent or your kid who is 17 years or older.
One thing I want to point out is that - this is a credit, not a tax deduction. While a deduction reduces your income, a credit reduces your tax dollar-for-dollar. So, for example, if you have a tax due of $2,000 for the year, and have a $2,000 child tax credit, your tax bill drops to zero.
To recap, here are the three things you need to know about the 2018 child tax credit: 1. The tax credit doubled, 2. Income range huge increase & 3. Other dependents’ $500 credit.
If you like to learn more, click the link lowermytaxnow.com and sign-in to receive my weekly blog.
Until then, this is Noel Dalmacio, your ultimate CPA at lowermytaxnow.com.
Last Updated by Admin on 2018-06-07 06:53:35 PM