Families working know how expensive it is to raise children. At tax time, the government offers these families some help through the 1997 child tax credit. This credit gives eligible families $ 2,000 per child under 17 years of age. Both Democrats and Republicans continued to support tax credit, which resulted in an expansion in 2001. Eligible families are now eligible to withdraw the right credit for the amount of tax they owed for the year. For example, a couple with three children can deduct $ 6,000 ($ 2,000 per child) from their yearly taxes. The child tax credit is reimbursable if the credit amount eligible for a family exceeds the amount of taxes that a family knows. This credit, known as the additional child tax credit, encourages families to work even if they receive low income, because they can claim the tax credit even if they do not owe taxes.
The most important provisions of the Tax Cuts and Jobs Act for taxpayers with children or other dependents may be changes in child tax credits. As in the previous legislation, taxpayers may claim a child tax credit for each child under the age of 17. However, the new law doubles the loan from 1,000 dollars per child to 2,000 dollars per child. Under the new law, the credit reduction does not begin until income exceeds 400,000 dollars on a joint return or 200,000 dollars on any other return. In 2018, low – income taxpayers will be reimbursed up to $ 1,400 of credit per child. Starting in 2018, taxpayers claiming child credit must show the social security number of the child (SSN) on the return. In the past, a taxpayer could give another tax number to a child without a SSN. New credit for other employees. The new law creates a new non – refundable $ 500 tax credit for dependents who are not eligible for the regular child tax credit, including children under 17 years of age who do not have an SSN.
Important poverty reduction The child tax credit has shown that it has a significant impact on poverty reduction across the United States. Last year alone, credit saved 3 million people from poverty, which includes 1.6 million children. The loan can be combined with the earned income tax credit to help raise the amount of money a family receives and help them to exceed the poverty line. Typically, child tax assistance is not available to many low – income families, and some, such as child and dependent care tax credit, are not reimbursable. The more income a family has, the less financial assistance they need.