![]() The value of the CTC increases with a household’s earnings, up to $2,000 per child (or $1,400 per child for the refundable portion). Reducing Poverty and Expanding Children’s Opportunities This refundability feature is important for low-income working families, who otherwise wouldn’t receive the tax benefits available to higher-income families to help offset the cost of raising children. For example, a single mother with two children who earns $14,000 in 2019 could receive 15 percent of $11,500, or $1,725, as a refund. When filing taxes for 2019 (due in April 2020), under the 2017 tax law, working families can receive a refund equal to 15 percent of their earnings above $2,500 this refund can be worth up to $1,400 per child. These families still pay payroll taxes, however. As a result, many working families can benefit from the credit even if their incomes are so low that they owe little or no federal income tax in a given year. This means that, if the value of the CTC exceeds the amount of federal income tax a family owes, the family may receive part or all of the difference in the form of a refund check. See this CBPP report for information on the current credit. ![]() ![]() Note: The 2021 American Rescue Plan significantly expanded and improved the Child Tax Credit for tax year 2021. ![]()
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