Key Takeaways: –
- Amount of Child Tax Credit per qualifying child will be double from $1,000 to $2,000 in 2018.
- Credit amount that is refundable will be up to $1,400. If your earned income is greater than $13,833 (subject to phaseout threshold below) and you have children under 17 years old, you will get a refundable tax credit of $1,400.
- The phase out threshold of this credit is over $240,000 for Single, and over $440,000 for Married filing jointly.
- Workers can save up to $5,000 in pretax dollars in a dependent care flexible spending account to cover costs for qualifying dependents.
Bottom Line – It may be a good idea for a stay home parent to work at least part-time to have some earned income to offset some child care costs, and to take advantage of the increase Child Tax Credit with refundable amount of $1,400.
Souce: Laus Consulting Services LLC