conniem123
Employee Tax Expert

Deductions & credits

Each tax return is unique in its income, adjusted gross income, and taxable income.  There may have been previous years when the Child Tax Credit was limited on your tax return due to income amounts, but the Child Tax Credit changes for 2021 have lower income limits than the original Child Tax Credit.

The Child Tax Credits in the past have been limited to the refundable portion.  For 2021, the new expanded Child Tax Credit allows for the amount to be fully refundable.  

 

You also want to consider the Earned Income Credit.  While one of you has earned income and one does not, ,the Earned Income Credit is based on earned income, and the dependents listed on the return.

 

Since there are two credits that could impact your return depending on income levels and the amount of credits eligible, it is best for you to prepare each return using various scenarios for the best outcome.  You can have all the income entered for the return, and then add/delete dependents to see the results, and select the best outcome.

 

https://turbotax.intuit.com/tax-tips/family/7-requirements-for-the-child-tax-credit/L3wpfbpwQ#2020-e...

 

https://turbotax.intuit.com/tax-tips/tax-deductions-and-credits/earned-income-credit/L4lmLBNWa

 

Hope you find this helpful!

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