Child tax credit

A child tax credit is a tax credit available in some countries, which depends on the number of dependent children in a family. The credit may depend on other factors as well, such as income level. For example, in the United States only families making less than $110,000 per year may claim the full credit. Similarly, in the United Kingdom the tax credit is only available for families making less than £42,000 per year. Germany has a programme called the 'Kinderfreibetrag'  which functions as a tax credit. The child allowance is an allowance in German tax law, which a certain amount of money is tax-free in the taxation of parents. In the income tax fee paid, child benefit and tax savings through the child tax credit are compared against each other, and the parents pay whichever results in the lesser amount of tax. In the United Kingdom, a family with children and an income below about £32,200 could claim child tax credit on top of child benefit. The tax credit is 'non-wastable' – it is paid whether or not the family has a net tax liability – and is paid in or out of work. Higher rates are paid for disabled children. It is integrated with the working tax credit, which also provides support for childcare costs. All taxable income is tested for the credit, so a couple who both work and have children, will have both salaries taken into account. Tax Credits may be capped which it is claimed could affect the poorest families disproportionately. On Monday 26 October 2015, the House of Lords voted for Labour Party proposals for financial redress to those affected by reduced entitlements. Since 2018 Child tax credit has been replaced by Universal Credit for most people. There are several different tax credits an American taxpayer can claim. (Tax credits work differently than tax deductions.) One of the most common is the Child Tax Credit, provided by 26 U.S.C. Sec. 24. The CTC is believed to have lifted about 3 million children out of poverty in 2016. The Tax Cuts and Jobs Act of 2017, with efforts led by Sen. Marco Rubio (R-FL) and Ivanka Trump, made three major changes to the CTC: (1) doubled the amount per qualifying child, from $1,000 to $2,000, (2) made up to $1,400 is refundable, and (3) increased income thresholds to make the CTC available to more families.