Financial Learning Center
- Rethinking Your Benefit Elections
- Disability and Life Insurance
- To Work or Not to Work
- Looking At Day Care
- Employing a Nanny
- Tax Advantages Associated with Children and Families
- Children's Taxes, Tax Returns, and the Kiddie Tax
- College Funding–There's No Time Like the Present
- Estate Planning and Children
- Other Tax Credits
Child Tax Credit
Parents may claim a $2,000 credit against federal income tax for each child under age 17. The credit is phased out starting from $400,000 of adjusted gross income for married joint filers and ($200,000 for single filers).
The child credit is partly refundable; the refundable portion is referred to as the "additional child tax credit." You receive a refundable credit if your Child Tax Credit is greater than the total amount of income taxes you owe, as long as you had an earned income of at least $2,500.
Earned Income Tax Credit
A credit is available to certain low-income taxpayers who have earned income. The maximum credit in 2019 is up to $529 ($519 in 2018) for a taxpayer with no children and who has earned income less than $15,570 ($15,270 in 2018), and $3,526 ($3,461 in 2018) for a taxpayer with one child and earned income less than $41,094 ($40,320 in 2018). For a taxpayer with two children and earned income less than $46,703 ($45,802 in 2018), the maximum 2019 credit is $5,828 ($5,716 in 2018). For 3 or more children, higher limits apply.
Child and Dependent Care Tax Credit
A credit is allowed for a portion of qualified child or dependent care expenses that are paid in order for the taxpayer to work. The maximum amount of child care expenses that can be considered is $3,000 for one child or dependent, or $6,000 for two or more. The credit is 35% of eligible child care expenses with income of less than $15,000, gradually reduced to 20% of qualifying expenses for income exceeding $43,000.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
Investment and insurance products and services are offered through INFINEX INVESTMENTS, INC. Member FINRA (Opens in a new Window)/SIPC (Opens in a new Window). UniVest Financial Services is a trade name of UniBank. Infinex and UniBank are not affiliated. Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of, nor guaranteed or insured by, any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.