What is the child tax credit? Q.What is the child tax credit? A.The child tax credit provides a credit of up to $2,000 per child under age 17. If the credit exceeds taxes owed, families may receive up to $1,600 per child as a refund. Other dependents—including children ages 17–18 and full-time college students ages 19–24—can receive a nonrefundable credit of up to $500 each. Read more about What is the child tax credit?
What are error rates for refundable credits and what causes them? Q.What are error rates for refundable credits and what causes them? A.The IRS estimates two types of error rates for the earned income tax credit (EITC): the improper payment rate and the over-claim rate. The former includes IRS enforcement activities while the latter does not. The IRS has estimated an EITC improper payment rate of between 22 and 26 percent of EITC payments and an over-claim rate of between 29 and 39 percent of dollars claimed. Read more about What are error rates for refundable credits and what causes them?
What is the earned income tax credit? Q.What is the earned income tax credit? A.The earned income tax credit subsidizes low-income working families. The credit equals a fixed percentage of earnings from the first dollar of earnings until the credit reaches its maximum. The maximum credit is paid until earnings reach a specified level, after which it declines with each additional dollar of income until no credit is available. Read more about What is the earned income tax credit?