New Tax Act Brings Changes to the Child Tax Credit

With 2018 in full swing, there have been tax changes that recently passed that double the amount Colorado families can claim under the Child Tax Credit.

In 2018, the previous $1,000 tax credit for each child was increased to $2,000.  The Child Tax Credit applies for each child under the age of 17.  The Act also provides a $500 non-refundable credit for dependents other than a qualifying child.

The reduction applies against tax liability.  To the extent that the Child Tax Credit exceeds your tax liability, you will be eligible for a refundable credit equal to 15% of earned income in excess of $2,500 with a maximum refundable credit of $1,400 per qualifying child.

The new change also provides increases in the income phase-out thresholds for this credit.  In 2017, the income phase-out for married couples filing jointly was $110,000.  In 2018, the income phase- out for married couples filing jointly increased to $400,000.

Every Colorado divorce separation agreement or parenting plan should address the Child Tax Credit for families with children under the age of 17.

Kalamaya | Goscha is a Colorado law firm specializing in child support, child custody, personal injury, DUI and criminal defense with offices located in Edwards, Glenwood Springs and Aspen.