I’m just wrapping up my taxes for 2017 and was reading about changes for next year, particularly the increase in the child tax credit. As I understand it the credit is jumping to $2000 with $1400 of that being refundable. I have 3 kiddos... so let’s say that my tax liability for 2018 turns out to be $3500 after deductions and let’s further assume I made no estimated payments or paycheck withholding. If I claim 3 children credits that means my entire tax liability is covered AND I’ll get $700 back as a “refund” of something I never paid to begin with?

If my federal income tax withheld was $7000 in this scenario that means I’d get that full $7000 back plus the extra $700 mentioned before?

Odd system we have here.

Happens all the time, getting a larger ‘refund’ than any amount that was withheld throughout the year.

Just do the calculations correctly,(I use TurboTax), and go with it.

Welfare by a different name.

I don’t make a ton of money but we are certainly making enough for our area.... I’m with Trump here. I’ll use the tax code to my benefit because it is too my benefit but man, it shouldn’t be this way.

Well,
my calculator stopped reading zero's but $3,500 X 300 million in USA minimum is something like... trillions ??? in revenue ???

and my liability is a helluva lot more than $3,500

At this point, and age, it all seems just like numbers anyhow 'cept the part about what I earn and get to keep

quote:

Originally posted by 220-9er:
Welfare by a different name.

That would be the earned income tax credit.

Well, with my house within $5000 of being paid off, and both kids out of the house, this thread depresses me.
But one of my neighbors, is up to 12 or 13 children, and a friend’s daughter is in the same boat. So their rebate could be almost as much as their income?

quote:

Originally posted by TBH:
Well, with my house within $5000 of being paid off, and both kids out of the house, this thread depresses me.
But one of my neighbors, is up to 12 or 13 children, and a friend’s daughter is in the same boat. So their rebate could be almost as much as their income?

After two kids I think the child tax credit changes to a much smaller number, and not sure if the number for kid 3+ is refundable. Never had more than 2 kids...just looked all that up...up to $1,400 of the credit is refundable under the new "$2,000 per child" law, I'm sure on a sliding scale based on income, but they can only claim the credit if they actually work and earn a few thousand dollars at least. And the non-refundable credit is $2,000 for EVERY child...so if you owed 3k and have four kids, the amount you owe would be reduced to zero, you may be eligible for the $6,431 below in EIC, plus up to $1,400 per kid for a total refundable credit of over $12,000. Or something like that...I'm not a CPA.



Still, my ex wife gets something in the neighborhood of $5,000-$7,000 back every year by not marrying her boyfriend she lives with. Plus the 12 grand I give her. I really don't care, as long as the kids have a stable environment there, which they do, but her damn take-home after her refunds and child support is as much or more than mine. That is nuts.

Edit: $6,431 in Earned Income Credit is the cap, for 3+ kids and at the bottom of the income scale: https://www.irs.gov/credits-de...it-amounts-next-year

quote:

Originally posted by sigmoid:
Well,
my calculator stopped reading zero's but $3,500 X 300 million in USA minimum is something like... trillions ??? in revenue ???

and my liability is a helluva lot more than $3,500

At this point, and age, it all seems just like numbers anyhow 'cept the part about what I earn and get to keep

Yea, but that 3500ish was BEFORE my 3 kids worth of tax credits for 2017. My total tax bill after that was under $500. I withheld 7700 (that part is my fault and purposeful). That’s on an income in the ballpark of 80 for the year. So essentially most homeowners making at that or less with 3 kids or more is hardly paying anything, right?

Now, if I look at next year and assume my income is roughly the same my tax will actually go down a bit due to the tax cuts and the child credit is going up? I’ll be in the negative next year for sure.

I’m not complaining just trying to understand this stuff. We are looking at doing some revocations to make our home more energy efficient as the 30 year old shake roof is done. So we are getting a nice modern roof and will likely get new windows too. A couple of contractors have mentioned solar as our area is well suited to it but one of their big selling points is a federal tax credit worth 30% of the solar system cost. Being a non-refundable credit I essentially wouldn’t benefit from that credit at all, would I?