New Law Increases Child Tax Credit

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Shutterstock_351904808For 2018, the new tax law doubles the credit to $2,000 for each dependent under the age of 17.  Up to $1,400 of the credit is refundable for low-income taxpayers.  The income level where the credit is phased out is much higher, but is eliminated for married couples with income over $400,000 and other filers with income over $200,000.

Personal exemptions are eliminated for 2018.  But in addition to the child tax credit increase (detailed above) there is a new $500 credit for each dependent who is not a qualifying child under the age of 17.  This will mainly be students, disabled adult children, and elderly parents in your care.  This credit is nonrefundable and phases out at the same levels as the child tax credit.

Meet with your tax preparer to see how these changes will affect you personally.