Expanded child tax credit may not be as generous as it seems

A 1040 tax form appears on display, Tuesday, Jan. 10, 2017, in New York. The IRS is delaying tax refunds for millions of low-income families as the agency steps up efforts to combat identity theft and fraud. Starting in 2017, a federal law requires the tax agency to delay refunds until Feb. 15 for people who claim the earned income tax credit and the additional child tax credit. The IRS says processing times will delay most of the refunds until the end of February. (AP Photo/Mark Lennihan)

By SARAH SKIDMORE SELL January 28, 2018 3 min read

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The child credit is designed to help working families offset some of the cost of raising children. Under current law, the credit lets households reduce their taxes by up to $1,000 for each child under their care. The tax overhaul doubled that credit to $2,000.

It also made more of the credit refundable. That means that if the credit lowers a family’s tax liability below zero, they can still receive the balance of the credit in the form of a tax refund. And more people will now be eligible to claim the credit because the income level at which it phases out has been raised.

On the surface, this sounds like happy news for American families. Yet tax experts say the expanded child credit will actually provide little relief for some of the lowest-income families.

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