What changed?

- The new law increases the child tax credit from $1,000 to $2,000.

- Eligibility factors for the credit have not changed. As in past years, a taxpayer can claim the credit if all of these apply:
     • the child was younger than 17 at the end of the tax year
     • the taxpayer claims the child as a dependent
     • the child lives with the taxpayer for at least six months of the year

- The credit is refundable, now up to $1,400. If a taxpayer doesn’t owe any tax before claiming the credit, they will receive up to $1,400 as part of their tax refund.
 
- The income threshold to claim the credit has been lowered to $2,500 per family. This means a family must earn a minimum of $2,500 to claim the credit.
 
- The income threshold at which the child tax credit begins to phase out is increased to $200,000, or $400,000 if married filing jointly. This means that more families with children younger than 17 qualify for the larger credit.

- New credit for other dependents. Dependents who can’t be claimed for the child tax credit may still qualify for the new credit for other dependents.  This is a non-refundable credit of up to $500 per qualifying person. These dependents may also be dependent children who are age 17 or older at the end of the tax year. It also includes parents or other qualifying relatives supported by the taxpayer.

To learn more about the new tax law: IRS Publication 5307 Tax Reform Basics for Individuals and Families