Information about IRS Child Tax Credits 2015 – 2016
Growing up children may prove to be costly for working family units. This gave a reason to the federal government to come up with what is called as Child Tax Credit (CTC) by which many of the qualifying working families may obtain a credit up to $1,000 per child below the age of 17.
The Child Tax Credit acknowledged a bipartisan support, and was extended in 2001. An eligible family will deduct the credit amount from the due taxes for the current year. If a pair has two qualified children, they can subtract $2,000 from the amount of payable taxes they need to pay (i.e. $1,000 per kid).
Chances of getting Refund
In case the credit amount increased than a given amount there is a provision in CTC that permits a family to qualify for a refund. This is called as Additional Child Tax Credit. This permits working family units to obtain benefit of the tax credit even if their earnings are short and they don’t owe any federal taxes.
For the 2014 income tax year, working families will be given a tax refund equal to 15% of their income more than $3,000, with a highest limit of $1,000 per child. This feature facilitates small income families acquire gain of the benefits that are frequently obtainable to higher earnings families.
Usefulness of CTC
The Child Tax Credit boosts up as the parent’s earnings increases to the $1,000 limit per child. Families needs to make greater than $3,000 for making themselves eligible for the tax credit, even though a family with an earnings between $3,000 and $16,333 and two children can obtain a fractional credit.
Importance of CTC
The day the Child Tax Credit came to its existence, it has brought poverty to considerable lower level. AS per te statistics available, previous year around 3 million people were saved from poverty due to benefits laid upon by the Child Tax Credits. This figure includes a big sum of 1.6 million children. The CTC can be clubbed up with Earned Income Tax Credit (EITC),which shall further help a lot many families to raise their standard of living and erupt out of poverty. It is generally noticed that families with smaller incomes do not qualify for other available Tax supporting programs for children, like Child and Dependent Care Tax Credit, which are not refundable.
More is the family earnings, lesser is the need of support with raising children. A family with two children who earns somewhat near about $110,000 a year will entertain a lesser CTC, while those having a yearly gross income of $150,000 shall not be eligible for any tax credit at all. Single parent or single tax filer earning a gross income of $75,000 shall receive a tax credit, but anyone earning above this will not be eligible to get a smaller tax credit. The boundary limit for single tax payers is $115,000, above which shall make you not eligible for any Tax Credits again.