Personal exemption & Child tax credit after the reform
The new law made changes to the child tax credit and personal exemptions. Here is a quick overview of the changes to the law:
Child tax credit:
The maximum child tax credit increased from $1,000 to $2,000 per qualifying child.
Taxpayers whose income was too high to benefit from the credit in prior years may now find that they qualify.
The credit now phases out at $400,000 for couples and $200,000 for singles, compared with 2017 amounts of $110,000 for couples and $75,000 for singles.
The maximum additional child tax credit increased from $1,000 to $1,400. This is a refundable portion of the credit for taxpayers who owe little or no federal income tax.
There’s a new $500 credit that can benefit taxpayers who support other dependents. For purposes of this new credit, the other dependents include qualifying children or qualifying relatives, such as a college student or an elderly parent.
The new law removes the personal exemption that taxpayers formerly claimed for themselves, their spouses and dependents.
Its recommended that taxpayers do a 'paycheck check-up' to determine if the tax law changes could affect their tax situation when they file in 2019. The check-up can be done using the IRS withholding calculator, which can be found here: https://www.irs.gov/individuals/irs-withholding-calculator.