The Tax Cuts and Jobs Act of 2017 was the most significant overhaul of the tax system in decades, with changes impacting almost every aspect of the code. Many of those changes may have a significant effect on your liability, especially if you have children and usually claim the child tax credit. While planning your tax preparation strategy for next year, be sure you understand how the changes impact your exposure.

3 Key Changes to the Child Tax Credit

1. Eliminated Dependent Deductions

While parents could formerly claim a deduction for each dependent child, the tax reform law completely eliminated this benefit. To make up the difference, the standard deduction has been nearly doubled, although families with many children may still see an increase in their taxes.

2. Increased Child Tax Credits

To offset the elimination of the dependent deduction, the new law significantly increases the child tax credit, from $1,000 to a maximum of $2,000 per qualifying child. Up to $1,400 of that credit is refundable, so you may collect the refund even if you didn’t pay that much on federal income taxes.

3. More Generous Eligibility Rules for Child Tax Credits

The child tax credit is gradually phased out for higher-income families, but the new rule raises the cutoff. The new rules raise this threshold to $400,000 for married couples filing jointly and $200,000 for all other taxpayers. For every $1,000 you make over that limit, the available credit will drop by $50. Your tax preparation professional will help determine your eligibility and how much you will be able to claim.

As a certified public accounting firm serving families throughout Lewisburg, PA, Donna J Troutman CPA PC provides a broad range of tax preparation services and friendly, personalized service. Their team stays up-to-date on all the most recent changes to the code, allowing them to help you collect every credit and deduction you’re entitled to. To get an early start on your tax preparation, visit their website or call their offices at (570) 523-7337 today.