This post includes affiliate links.  This means that a special tracking code is used and I will receive a commission at no cost to you. This supports my family so I can provide you with great content.

There are only a handful of tax breaks for parents. The Child Tax Credit is one of them. Many changes have been made to this credit under the new tax law reform for tax year 2018.

And there are some great changes as a matter of fact!

Thank goodness, right.

Save 30% at with this link

What is a tax credit?

A tax credit reduces your tax liability. Remember a tax deduction reduces your taxable income. So we love those tax credits.

This is a tax credit for each qualifying child you have.   Under the new law, the credit has doubled and is now as much as $2,000 per qualifying child.  Meaning for each qualifying child your tax liability can be reduced by $2,000.  Potentially 5 qualifying kids = $10,000 tax credit on your 1040.

TurboTax Deluxe Edition searches for more than 350 tax deductions and credits. Start today.

This credit used to phase-out at $110,000 for MFJ. NOW, this credit will phase-out if your AGI is over $400,000 for MFJ.   So if your income is under this amount, the credit will not be reduced. Woohoo, another big win!

Also, it is now refundable up to $1,400.

What is a refundable credit?

In prior years, the credit was nonrefundable. This means credit could only reduce your tax liability to $0- it could not give you a refund. So let’s say your tax liability was $700 – the child tax credit would reduce your liability to $0 and the remaining part of the credit $300 would disappear.

Now you can get a refund up to $1,400.  To calculate the amount of your potential refundable credit: (Earned income X 15%) – $2,500= refundable credit (maximum of $1,400)

This calculation is a little confusing. I would trust tax software like or TurboTax to calculate these credits for you based on simple questions they ask about your kids. But there is potential you could get a refund for this credit.

Limited Time Offer: Save $20 on TurboTax Deluxe, now only $39.99. Start Now!

What is a qualifying child?

The IRS has a very handy interactive tool on there website to determine if someone qualifies. Check it out- takes just a few minutes to complete:

Quick n’ Dirty – they have to be under 17, have a SSN, live with you half the year, you have to pay half their expenses and be your child/grandchild.  If you question any of these requirements for your situation – use the IRS interactive tool above.

Click here to use TurboTax Calculators and Tools. Estimate your refund and more.

Get my tax CHEAT SHEETS for individuals and businesses for free. Knowing these basic tax terms and due dates will help you gain confidence with your tax obligations.

Grab them below:

This blog is for informational purposes only. This is not intended to be personalized tax, legal or accounting advice.  You should always receive tax advice from someone who is familiar with your unique situation