Congress gave taxpayers good news when it permanently extended various expired tax provisions in the middle of December.
These changes include new restrictions, new penalties, and new due diligence requirements for practitioners. Eventually, this permanency gives taxpayers and practitioners a better ability to plan for these tax breaks without the annual worry of wondering whether they might be extended and for how long. Buried in the good news of the extensions were some other, less publicized changes that affect the child tax credit, the American opportunity credit, and the earned income tax credit.
Sec. Sec. Now look, the 10000, adjusted for inflation, in the threshold amount for determining whether a taxpayer is eligible for the refundable Sec, before the new legislation. While meaning that the credit can not exceed the taxpayer’s tax liability, The credit is generally nonrefundable. This refundable credit is commonly referred to as the additional child tax credit, and I know it’s calculated using a percentage of the taxpayer’s earned income for the year.