The child tax credit is again in the news because of potential increases by Congress. On this episode, I look at the history and the requirements.
I also look at how the credit is both nonrefundable and refundable. That means that the nonrefundable portion takes care of the tax liability before the refundable portion is available. The refundable portion is called the additional child tax credit. Currently, the additional child tax credit is calculated as 15% of the taxpayer’s AGI in excess of $2,500, with the refund value capped at $1,400.
From current news on the proposed child tax credit changes:
The Democrats’ new proposal would increase the credit amount by $1,000 ($1,600 for those with children under 6) and allow taxpayers to receive the full amount as a refund. Additionally, the plan would make the credit payable in monthly installments of $250 and $300, respectively, rather than just once a year. The payments would start to phase out for individuals earning more than $75,000 a year or $150,000 for those married filing jointly.
If passed, the Treasury Department could issue advance payments of up to half the 2021 child tax credit starting in July based on families’ 2019 or 2020 tax return information. If there is any overpayment of the credit, individuals making less than $40,000 ($60,000 for couples filing jointly) will not need to repay the amount, nor will it be garnished from wages.
Episode 198 - Interview with Temple Law Student Randy Goldson
Episode 197 - Interview with Temple Law Student Hyo Jin Lee
Episode 196 - Interview with Mary Ann David, Senior Attorney at Legal Services of Greater Miami
Episode 195 - Interview with Shahin Rahimi, Senior Attorney at Legal Aid Society of San Diego
Episode 194 - Interview with Cal Poly Low Income Taxpayer Clinic Director and Professor Lisa Sperow
Episode 193 - Interview with Syracuse Law Professor Robert G. Nassau
Episode 192 - Giving Thanks
Episode 191 - One Year of the Inflation Reduction Act
Episode 190 - Running the Temple Law Low Income Taxpayer Clinic!
Episode 189 - How to Challenge Worker Misclassification
Episode 188 - Review of ABA Tax Section May 2023 Meeting and Interviews with Leslie Book and Mandi Matlock
Episode 187 - Reflections on the 2023 Tax Filing Season
Episode 186 - Interview with Professor Keith Fogg
Episode 185 - Interview with Former National Taxpayer Advocate Nina Olson abd ABA Christine A. Brunswick Fellow Anna Gooch
Episode 184 - Interview with National Taxpayer Advocate Erin Collins
Farewell - IRS Office of Chief Counsel
Episode 182: The Broader Discussion of IRS Funding
Episode 181: KC Current Events and IRS Funding
Episode180: Workload Balancing
Episode 179: ABA 2022 May Tax Meeting Followup
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