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1 Taylor LaJoie, The Child Tax Credit: Primer 1 (2020)

handle is hein.taxfoundation/tfchtxc0001 and id is 1 raw text is: The Child Tax Credit: Primer FISCAL Taylor LaJoie FACT Policy Analyst No. 705 Apr. 2020 Key Findings * The Child Tax Credit (CTC) is a partially-refundable tax credit available to parents with qualifying dependents under the age of 17. Like other tax credits, the CTC reduces tax liability dollar-for-dollar of the value of the credit. * Taxpayers may claim a maximum credit of $2,000 for each child, with a portion of the credit refundable. If the credit is greater than the taxpayer's liability, they may receive a refund up to $1,400 based on an earned income formula. The maximum credit amount is reduced by 5 percent once adjusted gross income (AGI) reaches $200,000 for single filers and $400,000 for married filing jointly. * The CTC, in combination with other refundable tax credits, is explicitly designed to benefit low-income families with workers and children and can significantly boost incomes and lift families above the poverty line, according to the Congressional Research Service (CRS). Specifically, the CRS estimates that the Tax Cuts and Jobs Act's federal income tax rate changes reduced total poverty by 15 percent. Nearly all of the poverty reduction from the income tax changes were experienced by families that have both workers and children. The combination and interaction of various child tax benefits-including The Tax Foundation is the nation's the CTC, Earned Income Tax Credit (EITC), and Child and Dependent Care leading independent tax policy research organization. Since 1937, Tax Credit (CDCTC)-resu in vagueness, uplicaion, our research, analysis, and experts have informed smarter tax policy at the federal, state, and global levels. We are a 501(c)(3) nonprofit organization. @2020 Tax Foundation Distributed under Creative Commons CC-BY NC 4.0 Editor, Rachel Shuster Designer, Dan Carvajal Tax Foundation 1325 G Street, NW, Suite 950 Washington, DC 20005 202.464.6200 taxfoundation.org

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