topic I have 2 children under 2 years old. Why is my credit under $3,000? I thought you get $2,000 for each child? in Deductions & credits

I have 2 children under 2 years old. Why is my credit under $3,000? I thought you get $2,000 for each child?

charles_rickerso — Wed, 08 Jan 2020 05:19:29 GMT

Re: I have 2 children under 2 years old. Why is my credit under $3,000?I thought you get $2,000 for each child?

Hal_Al — Wed, 08 Jan 2020 10:33:53 GMT

Your income is too low. The child tax credit (CTC) is limited to your tax liability. The CTC is a non-refundable credit and can only reduce your income tax to 0, It can not help you beyond eliminating your tax liability. But, if you have more than $2500 of earned income, some or all of it is usually given back to you thru the "Additional Child tax credit". That is, part of the CTC may be on line 18b of form 1040 (2019 version) instead of line 13a (lines 17 and 12 in 2018). The ACTC is calculated on form 8812 and is basically 15% of your earned income over $2500. The ACTC is a maximum of $1400 per child (not $2000).

Re: I have 2 children under 2 years old. Why is my credit under $3,000?I thought you get $2,000 for each child?

xmasbaby0 — Wed, 08 Jan 2020 15:32:22 GMT

There was lots of hype in the news about the new $2000 Child Tax Credit when the tax law changed for 2018 and beyond. Unfortunately, some people do not yet understand that it does not mean they will automatically receive $2000 per child just for filing a tax return.

Do not assume your refund will include $2000 per child for child tax credits. It does not work that way. The CTC is used first to reduce your tax liability to zero. After that, there is a refundable portion —up to $1400 — called the Additional Child Tax Credit that is calculated based on the amount of income you earned. You do not necessarily get the maximum amount. You get 15% of the amount of income earned above $2500--UP to the maximum amount possible.

If your child turned 17 in 2019, even on the last day of 2019, you do not get the child tax credit. There are no exceptions to the rule. You can still claim your child as a dependent.

Your child must have a Social Security number to get the CTC.

If your child was born in 2019 you need to say the child lived with you for the WHOLE year.

If your child lived with you for less than half the year you cannot get CTC.

If you did not earn at least $2500 you cannot receive the child tax credit. Beyond that amount the CTC you receive is affected by your tax liability and the amount you earned. You might not get the full $2000 of CTC.

The child tax credit is reduced by $50 for every $1000 of AGI over these limits:

Married filing jointly $400,000 (CTC disappears at $440,000)

Single, Head of Household, Married Filing Separately or qualifying widower $200,000 (CTC disappears at $240,000)