How the New Child Tax Credit Income Limit Will Affect Families
July 17, 2023The child tax credit is a major financial break for families with young children. But a new income limit will start to phase out the credit for some households next year. Here’s what you need to know.
How the new child tax credit income limit will affect families
The new child tax credit income limit will affect families who earn more than $200,000 per year. The credit will be reduced for these families, meaning they will receive less money back from the government. This change could have a significant impact on families who are used to receiving a certain amount of money back from the child tax credit. It’s important to understand how this change will affect your family so you can plan accordingly.
What is the new child tax credit income limit is
The new child tax credit income limit is $75,000 for single filers and $150,000 for married filers. This means that if your family makes less than these amounts, you may be eligible for the child tax credit. The child tax credit is a credit that families can receive for each child under the age of 18. The credit is worth up to $2,000 per child. Families who make more than the income limits may still be able to receive a partial credit.
How many children the new child tax credit income limit will cover
The new child tax credit will cover children under the age of 6 and children under the age of 18. The income limit for the credit is $200,000 for single filers and $400,000 for joint filers. The credit is worth up to $2,000 per child. Families with children who are not covered by the credit will still be able to claim a $500 credit for each child.
What families will be affected by the new child tax credit income limit
The new child tax credit income limit is $400,000 for married couples filing jointly and $200,000 for all other taxpayers. This change will affect families who have an income over these limits and will no longer be able to claim the child tax credit. The child tax credit is worth up to $2,000 per child under the age of 17. Families who are affected by this change may see their taxes increase by the amount of credit they are no longer able to claim.
When the new child tax credit income limit will take effect
The new child tax credit income limit will take effect in 2021. This means that families with an income of $75,000 or less will be eligible for the credit. The credit is worth up to $3,000 per child and is refundable, meaning that it can be paid out even if the family owes no taxes. The changes are part of the American Rescue Plan, which was passed by Congress in March 2021. Families who are eligible for the credit will receive the full amount if they have three or more children. Families with two children will receive a credit of $2,400, and families with one child will receive a credit of $1,500. The credit will be paid out in monthly installments, starting in July 2021.
If you have young children, the child tax credit is a major financial break that you may be eligible for. However, a new income limit will start to phase out the credit for some households next year. For more information on this and other changes to the tax code, be sure to speak with a qualified tax professional.
