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🤷🏽‍♂️ gotta love how they set "low income" at roughly double the median income. 

I guess it keeps most people from being upset about it.

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5 minutes ago, Capella said:

I asked this in another thread but does this just reduce your taxable income, or if you have one kid and you owe 1600, now you owe 0?

Yes to your question.  Tax Credits are a dollar for dollar reduction in your tax bill.  Tax Deductions reduce your taxable income.  I’m not a tax advisor but that’s my understanding. 

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11 minutes ago, Capella said:

I asked this in another thread but does this just reduce your taxable income, or if you have one kid and you owe 1600, now you owe 0?

It's a fully refundable tax credit.

If a family with 2 children 6-17 owes $5,000, they'll get $1,000 back.

Or, you know, purely hypothetically. A family with 4 children 6-17 won't owe any taxes until they would owe $12,000 in taxes.

Edited by -OZ-
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5 minutes ago, Lion to myself said:

Yes to your question.  Tax Credits are a dollar for dollar reduction in your tax bill.  Tax Deductions reduce your taxable income.  I’m not a tax advisor but that’s my understanding. 

 

5 minutes ago, -OZ- said:

It's a fully refundable tax credit.

If a family with 2 children 6-17 owes $5,000, they'll get $1,000 back.

Or, you know, purely hypothetically. A family with 4 children 6-17 won't owe any taxes until they would owe $12,000 in taxes.

Thanks! That rules. 

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It's essentially a BIG doled out in one lump sum.

ETA:  But apparently there is a provision whereby they will actually pay half of it out from July-December of this year in monthly payments.

Edited by Jayrod
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2 minutes ago, Capella said:

 

Thanks! That rules. 

If my math is right, that family filling joint with 4 children ages 6-17 can make just over $118,000 (assuming just the standard deduction) and pay no federal taxes. There are other credits and deductions but that's my simple math.

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5 minutes ago, Jayrod said:

It's essentially a BIG doled out in one lump sum.

ETA:  But apparently there is a provision whereby they will actually pay half of it out from July-December of this year in monthly payments.

This is a good point which people need to be aware. Usually the CTC lowers your tax bill (duh) but if they're paying July-December it will reduce your taxes less than usual. Just something to consider with withholdings. 

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3 minutes ago, -OZ- said:

This is a good point which people need to be aware. Usually the CTC lowers your tax bill (duh) but if they're paying July-December it will reduce your taxes less than usual. Just something to consider with withholdings. 

I didn't find any details on if this was going to be automatic based on some criteria or if you were going to have to apply for it somehow.  Either way, I think it will be targeted to people in poverty, not the families making $100-150K/year.

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34 minutes ago, trogg78 said:

I have 7 kids, 5 under 18. The government is going to give me $18,000 a year tax credit?!?!

Any under 6 will add $600

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1 hour ago, Jayrod said:

I didn't find any details on if this was going to be automatic based on some criteria or if you were going to have to apply for it somehow.  Either way, I think it will be targeted to people in poverty, not the families making $100-150K/year.

I'd be on board with that, but it's not what I'm reading. Details will come but at least the speculation is that the money will be automatic. 

I'm okay with getting the extra $1k monthly. But this seems overly expensive.

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1 hour ago, Jayrod said:

I didn't find any details on if this was going to be automatic based on some criteria or if you were going to have to apply for it somehow.  Either way, I think it will be targeted to people in poverty, not the families making $100-150K/year.

I'm sure the everyone will spend it all on their kids and not buy more cigarettes, alcohol and big TV's.  They will also not have more kids to get more money.

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2 hours ago, Capella said:

I asked this in another thread but does this just reduce your taxable income, or if you have one kid and you owe 1600, now you owe 0?

 

I'm okay with this. What I don't like is when you have one kid and owe $1500 and get a $100.00 refund.  It should just bottom out at zero,

That's been my beef with the EITC for years.

 

 

 

 

Edited by E Street Brat
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40 minutes ago, bcat01 said:

I'm sure the everyone will spend it all on their kids and not buy more cigarettes, alcohol and big TV's.  They will also not have more kids to get more money.

You forgot ice cream cakes.

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57 minutes ago, bcat01 said:

I'm sure the everyone will spend it all on their kids and not buy more cigarettes, alcohol and big TV's.  They will also not have more kids to get more money.

Studies of the Canadian child allowance found that the cash transfers *reduced* parents' spending on temptation goods like alcohol and cigarettes, presumably because they were less stressed about the family's financial situation. Good stuff. :thumbup:

https://www.nber.org/system/files/working_papers/w21101/w21101.pdf

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1 hour ago, General Malaise said:

Under 6 as of when?

I'm not sure. I'd assume each calendar year.

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18 minutes ago, psychobillies said:

I'll never understand why people with kids should be paying less in taxes than people who don't have kids.   It should be the exact opposite. 

Its an economic stimulus to allow parents to afford child care, so they can keep working.

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19 minutes ago, psychobillies said:

I'll never understand why people with kids should be paying less in taxes than people who don't have kids.   It should be the exact opposite. 

For this round, it's supposed to be so kids are less likely to grow up in poverty. Which apparently is defined as making less than $75k or $150k. 🤷🏽‍♂️

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24 minutes ago, psychobillies said:

I'll never understand why people with kids should be paying less in taxes than people who don't have kids.   It should be the exact opposite. 

Its an investment in the future.

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11 hours ago, -OZ- said:

For this round, it's supposed to be so kids are less likely to grow up in poverty. Which apparently is defined as making less than $75k or $150k. 🤷🏽‍♂️

Credit goes all the way up to 400 grand I believe. 

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3 hours ago, Capella said:

Credit goes all the way up to 400 grand I believe. 

The full child tax credit will be available to individuals who earn up to $75,000 and couples earning up to $150,000. 

 

From there, the credit will be reduced by $50 for every additional $1,000 of adjusted gross income earned. That means, for example, the $3,000 credit provided to parents of a child aged 6 to 17 would be phased out completely for individuals earning $95,000 and those making $170,000 and filing jointly.  

 

 

Families who are ineligible for the new $3,000 credit because they earn higher AGI are still able to claim the $2,000 per child tax credit, which is available to individuals making up to $200,000 ($400,000 for married couples filing jointly).

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