LENDING PARENTS A HELPING HAND: President Donald J. Trump’s tax cuts are helping parents with the costs of raising a family.
- The Tax Cuts and Jobs Act (TCJA) increased and improved the Child Tax Credit to help parents as they raise a family.
- The Child Tax Credit was doubled from $1,000 to $2,000 per qualifying child, providing a financial boost to American families.
- The TCJA expanded eligibility for the Child Tax Credit, allowing more families to benefit.
- The refundable portion of the Child Tax Credit was increased to help middle and lower income families.
- The refundable portion of the Child Tax Credit was increased from $1,000 to $1,400.
- This change helps families who do not have enough income tax liability to offset the full amount of the credit
HELPING FAMILIES’ BOTTOM LINE: The Tax Cuts and Jobs Act kept in place or expanded a number of provisions aimed at helping American families’ finances.
- The TCJA maintained key tax benefits that help American families, including:
- The Adoption Tax Credit that helps Americans who have the joy of adopting a child into their hearts and their homes.
- The Child and Dependent Care Credit that helps families with the costs of child care and care for older dependents.
- The Earned Income Tax Credit that helps lower-income Americans working to build a better life for themselves and their families.
- Popular retirement savings options, such as 401(k)s and Individual Retirement Accounts, that help Americans save for their future.
- American families benefited from an expanded medical expense deduction in tax years 2017 and 2018.
- Thanks to the TCJA, families are seeing lower utility bills, in addition to lower tax bills.
- At least 100 utility companies across the country have announced plans to lower rates for their customers due to the law.
INVESTING IN OUR CHILDREN’S FUTURE: The Tax Cuts and Jobs Act included reforms to help give parents more financial flexibility to send their children to the schools of their choice.
- Thanks to the TCJA, parents have a new way of saving for their children’s primary and secondary educations.
- The TCJA expanded the types of qualified expenses for 529 Savings Accounts to allow parents to use the accounts to pay for their child’s education at primary and secondary schools.
- Under the law, up to $10,000 can be used annually from a 529 Savings Account to pay for tuition.
- By using these accounts, parents will be able to save to help ensure their children receive the best quality education possible.