Child tax credit

[mommybarbell]

We have one child now and are expecting our 2nd in December.

1) How will this impact our taxes?

2) Will the child tax credit amount be added to our refund total, or does it simply just increase our deductible amount?  

[Cindy4]

Congratulations!

The Child Tax Credit is a credit that reduces your tax owed.  The Additional Child Tax Credit is refundable.

This means that if your income falls below the threshold - 200,000, or 400,000 if married filing jointly - you qualify for the full 2,000 Child Tax Credit for each qualifying child.  Your tax owed will be reduced.  The refundable part of the credit is worth up to 1,600 for each qualifying child.  This comes into play if you don't use the entire 4,000 to reduce the tax owed.  The remaining unused portion will be applied as a payment, like your withholding, and what you don't use will be refunded.

The IRS offers an interactive assistant to help you determine if your child qualifies.

Hope this helps!

Cindy