November 22, 2020

Child Tax Credit 2020

Child Tax Credit 2020 welcome to home biz tax top of my name is lissandra Everett I am the home visit axe lady where I help home business owners win the tax game home biz tax talk airs Monday through Friday 9:00. O'clock ish and when you tune into my show you're gonna hear about topics that are important to, the home business community okay so today. We're talking about the child tax credit and oddly enough I've been getting a lot of questions about this.

Over the last week and so the final straw is I got one yesterday so we're talking about it today okay so the main reason I want to talk about this is because of course there. Is always the fight or the race I should say when you have unmarried parents who are racing to claim the, child first and that really has you know accelerated because of the increase in the child tax credit.

So I want to kind. Of talk about what that looks like and everything okay so the child tax credit with with tax reform was increased to $2,000 per child now that is what everybody heard. $2,000 per child but only the first 1400 of that is refundable so what that means is is, that if you have a child if you have a tax liability of zero and you have the child tax credit you're only going to get $1,400 you're not going, to get the two full $2,000 so, if you've got a tax liability let's say up three thousand dollars and you have the child tax credit then you'll get. Access to the full $2,000 it's not going to take you below zero only that first $1,400 is is tax deductible now the, the one thing that you also want to make sure you understand is that there is a phase-out so that means that you know up to us you, you can get the child tax credit up to a certain. Point so the the other thing that happened what was really cool is that prior to 2018 you, had to have earned income of Atlit of at least $3,000 but that was lower. To $2,500 starting January 1st 2018 the cut-offs still remains at 17 okay so that part did not change and then, the phase out for the child tax credit also increased which was great so it's two hundred thousand dollars for.

Single head of household and phase out four hundred thousand dollars for a joint filer so that means that once you hit, those thresholds for income that child tax credit gets reduced so now the with the, elimination of.

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