This is a solid myth. If you have children there is a substantial gift tucked into the Tax Cuts and Jobs Act of 2017, despite the record-breaking deficits and debt it is already creating. Here are the details, straight from IRS.
- Credit amount. The new law increases the child tax credit from $1,000 to $2,000. Eligibility for the credit has not changed. As in past years, the credit applies if all of these apply:
- the child is younger than 17 at the end of the tax year, December 31, 2018
- the taxpayer claims the child as a dependent
- 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. If a taxpayer doesn’t owe any tax before claiming the credit, they will receive up to $1,400 as part of their refund.
- Earned income threshold. The income threshold to claim the credit has been lowered to $2,500 per family. This means a family must earn a minimum of $2,500 to claim the credit.
- Phaseout. The income threshold at which the child tax credit begins to phase out is increased to $200,000, or $400,000 if married filing jointly. This means that more families with children younger than 17 qualify for the larger credit.
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