Your Child, Your Credit
Along with a new member of your family, there also comes a $1,000 child tax credit for lower and middle-income earners. You will keep getting this gift every year until your son or daughter turns 17.
The difference between a deduction and a credit is that the credit can’t be taxed by the government. Therefore, yout $1,000 child credit will reduce your tax bill by $1,000. If your income rises above $110,000 on joint returns, though, your credit will begin to disappear. The same rule applies if your income is above $75,000 on single and head-of-household returns.
The great news is that in 2018, the offer will get even better. To begin with, the value of the credit gets doubled to $2,000, which is already a pretty big deal. Furthermore, the new tax law increases the income phase out thresholds, which means that more middle-class families will get child credits.
