How do state child tax credits work? Q.How do state child tax credits work? A.A state child tax credit (CTC), like the federal version, is a tax credit for households with eligible children. However, both the amount of the credit and the eligibility rules for households vary considerably across states. Read more about How do state child tax credits work?
How does the tax system subsidize child care expenses? Q.How does the tax system subsidize child care expenses? A.Working parents are eligible for two tax benefits to offset child care costs: the child and dependent care tax credit and the exclusion for employer-provided child care. The credit benefits only a small share of parents because relatively few have formal child care expenses that qualify for the credit. Read more about How does the tax system subsidize child care expenses?
How did the 2021 American Rescue Plan Act Change the Child Tax Credit? Q.How did the 2021 American Rescue Plan Act Change the Child Tax Credit? A.For 2021, the child tax credit provided a credit of up to $3,600 per child under age 6 and $3,000 per child from ages 6 to 17. If the credit exceeded taxes owed, families could receive the excess amount as a refund. From July 2021 to December 2021, half of the credit was automatically paid on a monthly basis to most families in advance of their filing a tax return. Families could opt out of advance payments. Read more about How did the 2021 American Rescue Plan Act Change the Child Tax Credit?