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.
Your Constructive Comments are Welcome!
You cherry pick one example. Cute. What about not being able to deduct rental property losses if income is over $150K? Even if you have 6 kids. What about stimulus being completely phased out at $160K? What about decreased exemptions and higher itemization limits? What about cash out refis not being deductible? What about the FAFSA no longer considering siblings in college? Large families have been hammered the past 6 years. The only myth is that you have a clue.
Naturally, a lot has changed in the last 5 yrs.