![]() Now you know the top five write-offs for W-2 employees so that you can head into this tax season prepared to take the right deductions. If you're a taxpayer with children, there is a chance they qualify as dependents and you can qualify to receive the $2,000 credit for 2020 in addition to a $3,000 or more credit in 2021. It does require half of the credit to be paid in advance by the IRS in the form of periodic payments to families between July 2021 and December 2021. ![]() Depending on the family, it makes the credit refundable while removing the $2,500 earnings floor. This credit rises to $3,600 per child under the age of 6. In 2021, however, the American Rescue Plan Act offers a benefit in the form of an increased credit of $3,000 per dependent. At these thresholds, the credit drops $50 for every $1,000 (or fraction thereof) of AGI over the threshold amount. The threshold is $200,000 for a single or head-of-household return. It is a credit that phases out if your adjusted gross income (AGI) rises above the threshold of $400,000 on a joint return. The Child Tax Credit: This tax credit is for taxpayers with children under the age of 17, who qualify to be on the tax return and claimed as a dependent on the return.
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