• James D. Lynch

New Tax Rules Regarding the Child Tax Credit

Credit Amount: the child tax credit has increased from $1,000 to $2,000 per child. As in past years, a taxpayer can claim the credit if all of these apply: 1) the child was younger than 17 at the end of the tax year, 2) the taxpayer claims the child as a dependent, and 3) the child lives with the taxpayer for at least six months of the year.


Credit Refunds: The credit is refundable, now up to $1,400. This means a taxpayer who doesn’t owe any tax before claiming the credit can still receive up to $1,400 as part of their tax refund.


Earned Income Threshold: The minimum income needed to claim the credit has been lowered to $2,500 per family. This means a family must earn at least $2,500 to claim the credit. The upper income limit at which the child tax credit begins to phase out is increased to $200,000, or $400,000 if married filing jointly. This allows more families to qualify for the child tax credit.