Child tax credit

Short description: Tax credit for parents with children

Not to be confused with Tax on childlessness.

Taxation

An aspect of fiscal policy

Policies

* Government revenue
* Property tax equalization
* Tax revenue
* Non-tax revenue
* Tax law
* Tax bracket
* Tax threshold
* Exemption
* Credit
* Deduction
* Tax shift
* Tax cut
* Tax holiday
* Tax advantage
* Tax incentive
* Tax reform
* Tax harmonization
* Tax competition
* Double taxation
* Representation
* Unions
* Medical savings account
* Tax, tariff and trade

Economics

|  General Theory

* Price effect
* Excess burden
* Tax incidence
* Laffer curve
* Optimal tax
* Theory
* Optimal capital income taxation

Distribution of Tax

* Tax rate
* Flat
* Progressive
* Regressive
* Proportional

Collection

* Revenue service
* Revenue stamp
* Tax assessment
* Taxable income
* Tax lien
* Tax refund
* Tax shield
* Tax residence
* Tax preparation
* Tax investigation
* Tax shelter
* Private tax collection
* Tax farming

Noncompliance

|  General

* Tax avoidance
* Tax evasion
* Tax resistance
* Tax shelter
* Smuggling
* Black market
* Unreported employment

Corporate

* Tax inversion
* Transfer mispricing
* Base erosion and profit shifting (BEPS)
* Double Irish
* Dutch Sandwich
* Single Malt
* CAIA/Green Jersey

Locations

* Tax havens
* Corporate tax havens
* Offshore financial centres (OFCs)
* Offshore magic circle
* Conduit and Sink OFCs
* Financial centres
* Financial Secrecy Index

Major examples

* Apple €13 billion fine
* Ireland as a tax haven
* Leprechaun economics
* Liechtenstein tax affair
* Luxembourg Leaks
* Offshore Leaks
* Paradise Papers
* Panama Papers
* Swiss Leaks
* United States as a tax haven
* Panama as a tax haven

Types

* Direct
* Indirect
* Per unit
* Ad valorem
* In rem
* Capital gains
* Carbon
* Consumption
* Dividend
* Ecotax
* Excise
* Fuel
* Georgist
* Gift
* Gross receipts
* Income
* Inheritance (estate)
* Land value
* Payroll
* Pigovian
* Property
* Sales
* Sin
* Single
* Stamp
* Steering
* Turnover
* Value-added (VAT)
* Corporate profit
* Excess profits
* Windfall profits
* Negative (income)
* Wealth

International

* Financial transaction tax
* Currency transaction tax
* European Union Common Consolidated Corporate Tax Base (CCCTB)
* Tobin tax
* Spahn tax
* Tax equalization
* Tax treaty
* Permanent establishment
* Transfer pricing
* European Union FTT
* Foreign revenue rule

Trade

* Custom
* Duty
* Tariff
* Import
* Export
* Tariff war
* Free trade
* Free trade zone
* Trade agreement
* ATA Carnet

Research

|  Academic

* Mihir A. Desai
* Dhammika Dharmapala
* James R. Hines Jr.
* Ronen Palan
* Joel Slemrod
* Gabriel Zucman

Advocacy groups

* Tax Justice Network (TJN)
* Institute on Taxation and Economic Policy (ITEP)
* Oxfam (UK)
* Tax Foundation (US)
* Tax Policy Center (US)

Religious

* Church tax
* Eight per thousand
* Teind
* Tithe
* Fiscus Judaicus
* Leibzoll
* Temple tax
* Tolerance tax
* Jizya
* Kharaj
* Khums
* Nisab
* Zakat

By country

|  All Countries

* List of countries by tax rates
* Tax revenues as % of GDP
* Tax rates in Europe

Individual Countries

* Albania
* Algeria
* Argentina
* Australia
* Azerbaijan
* Bangladesh
* Bhutan
* Brazil
* Bulgaria
* BVI
* Canada
* China
* Colombia
* Croatia
* Denmark
* Finland
* France
* Germany
* Greece
* Hong Kong
* Iceland
* India
* Indonesia
* Iran
* Ireland
* Israel
* Italy
* Japan
* Kazakhstan
* Lithuania
* Malta
* Morocco
* Namibia
* Netherlands
* New Zealand
* Norway
* Pakistan
* Palestine
* Peru
* Philippines
* Poland
* Portugal
* Russia
* Singapore
* South Africa
* Sri Lanka
* Sweden
* Switzerland
* Taiwan
* Tanzania
* United Kingdom
* United States
* Uruguay

* v
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* e

A child tax credit (CTC) is a tax credit for parents with dependent children given by various countries. The credit is often linked to the number of dependent children a taxpayer has and sometimes the taxpayer's income level. For example, with the Child Tax Credit in the United States, only families making less than $400,000 per year may claim the full CTC. Similarly, in the United Kingdom, the tax credit was only available for families making less than £42,000 per year.

## Contents

* 1 Germany
* 2 United Kingdom
* 3 United States
* 4 See also
* 5 Notes
* 6 References

## Germany

Germany has a programme called the Kinderfreibetrag (de) which, despite technically being a tax exemption and not a tax credit, functions similarly. The child allowance is an allowance in German tax law, in which a certain amount of money is tax-free in the taxation of parents. In the income tax fee paid, child benefit and tax savings through the child tax credit are compared against each other, and the parents pay whichever results in the lesser amount of tax.

## United Kingdom

| Parts of this finance (those related to section) need to be updated. Please update this finance to reflect recent events or newly available information. (April 2019)

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In the United Kingdom, a family with children and an income below about £32,200 could until April 2025 claim the child tax credit on top of child benefit. Though referred to as a "tax credit", receipt of the payment was not connected with or conditional upon the amount of tax a person paid; it was more akin to a welfare payment. Higher rates were paid for disabled children. It was integrated with the Working Tax Credit, which also provided support for childcare costs.

All taxable income was tested for the credit, so a couple who both worked and had children had both salaries taken into account. Tax Credits could be capped, and it was claimed that this could affect the poorest families disproportionately. On Monday 26 October 2015, the House of Lords voted for opposition Labour Party proposals to provide financial redress to those affected by reduced entitlements.[1]

Since 2018 Child Tax Credit has been replaced by Universal Credit for most people. UK citizens may claim Child Benefit which is paid out by the UK tax authority HMRC and anyone earning less than £60,000 year can receive the full benefit. Anyone earning between £60,000 and £80,000 per year pays a percentage of their benefit back in tax, and those earning £80,000 or more per year pay the full amount back.[2]

The Child Tax Credit and Working Tax Credit schemes closed on 5 April 2025. No further Tax Credit payments were made and all claimants had to migrate to Universal Credit.[3]

## United States

Comparison of the expanded CTC and the CTC under the Tax and Jobs Act of 2017 for a married couple filing jointly (depicts amount of credit per child)

The child tax credit is available to taxpayers who have children under the age of 17 (or in 2021 under the age of 18). Since 2018, the CTC is $2,000 per qualifying child. It is available in full to single filers who make up to $200,000 and married couples filing jointly who make up to $400,000. Above these limits, the CTC is phased out at the rate of $50 for each additional $1,000 earned.[4] When a taxpayer's credit value exceeds his or her tax liability, the taxpayer is eligible for the additional child tax credit (ACTC), which is calculated as 15% of the taxpayer's AGI in excess of $2,500 (i.e. a family must make at least $2,500 to be eligible for the credit), with the refund value capped at $1,400.

The American Rescue Plan Act (ARP) of 2021 significantly expanded the child tax credit for one year, allowing qualifying families to offset $3,000 per child up to age 17 and $3,600 per child under age 6. It also made the credit fully-refundable and offered the option of receiving half of the credit as six monthly payments. 39 million households, covering 88% of children in the United States, will begin receiving these payments automatically beginning July 15, 2021.[5] The proposed Build Back Better Act would extend the expansion for an additional year and make the full refundability of the CTC permanent.[6]

The child tax credit has a significant effect on child poverty. In 2016, it was estimated to have lifted about 3 million children out of poverty.[7] In 2021, a Columbia University study estimated that the expansion of the CTC in the American Rescue Plan Act reduced child poverty by an additional 26%, and would have decreased child poverty by 40% had all eligible households claimed the credit.[8]

## See also

* Parental dividend
* Taxation in the United Kingdom
* UK labour law
* Taxation in the United States

## Notes

1. ↑ "Tax credits: No return to 'uncontrolled' spending says Osborne". 2015-10-27. https://www.bbc.co.uk/news/uk-politics-34644262.
2. ↑ "The High Income Child Benefit Charge threshold". 2024-03-06. https://www.gov.uk/government/publications/income-tax-increasing-the-high-income-child-benefit-charge-threshold/the-high-income-child-benefit-charge-threshold.
3. ↑ "Tax credits ended on 5 April 2025". https://www.gov.uk/tax-credits-have-ended.
4. ↑ "Child Tax Credit". Internal Revenue Service. 2015-01-01. https://www.irs.gov/pub/irs-pdf/p972.pdf.
5. ↑ "Treasury and IRS Announce Families of 88% of Children in the U.S. to Automatically Receive Monthly Payment of Refundable Child Tax Credit". Internal Revenue Service. 17 May 2021. https://home.treasury.gov/news/press-releases/jy0177.
6. ↑ Zhou, Li; Leber, Rebecca; Scott, Dylan; Matthews, Dylan (October 28, 2021). "What's in — and what's out of — Biden's latest spending proposal". https://www.vox.com/2021/10/28/22748554/biden-budget-build-back-better-democrats-child-care-taxes.
7. ↑ M.S.R. (16 October 2017). "Why Ivanka Trump wants to extend the child tax credit". The Economist. https://www.economist.com/blogs/democracyinamerica/2017/10/credit-where-it-s-due.
8. ↑ Parolin, Zachary; Collyer, Sophie; Curran, Megan A.; Wimer, Christopher (August 20, 2021). "Child poverty drops in July with the Child Tax Credit expansion". Columbia University. https://static1.squarespace.com/static/5743308460b5e922a25a6dc7/t/612014f2e6deed08adb03e18/1629492468260/Monthly-Poverty-with-CTC-July-CPSP-2021.pdf.

## References

* Samuel A. Donaldson, Federal Income Taxation of Individuals: Cases, Problems and Materials, 2nd Edition (St. Paul: Thomson/West, 2007)

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Parenting

Kinship terminology|

* Adoptive
* Alloparenting
* Coparenting
* Extended family
* Foster care
* Kommune 1
* Noncustodial
* Nuclear family
* Orphaned
* Shared parenting
* Single parent
* Blended family
* Surrogacy
* In loco parentis

Theories · Areas|

* Attachment theory
* Applied behavior analysis
* Behaviorism
* Child development
* Cognitive development
* Developmental psychology
* Human development
* Love
* Maternal bond
* Nature versus nurture
* Parental investment
* Paternal bond
* Pediatrics
* Social psychology

Styles|

* Attachment parenting
* Baby talk
* Concerted cultivation
* Gatekeeper parent
* Helicopter parent
* Nurturant parenting
* Slow parenting
* Soccer mom
* Strict father model
* Taking children seriously
* Tiger parenting
* Work at home parent

Techniques|

* After-school activity
* Allowance
* Bedtime
* Child care
* Co-sleeping
* Homeschooling
* Latchkey kid
* Parent management training
* Play (date)
* Role model
* Spoiled child
* Television
* Toy (educational)

Child discipline|

* Blanket training
* Corporal punishment in the home
* Curfew
* Grounding
* Tactical ignoring
* Time-out

Abuse|

* Child abandonment
* Child abuse
* Child labour
* Child neglect
* Cinderella effect
* Incest
* Narcissistic parent
* Parental abuse by children

Legal and social
aspects|

* Child custody
* Child support
* Cost of raising a child
* Deadbeat parent
* Disownment
* Marriage
* Parental alienation
* Parental responsibility
* Paternity
* Shared parenting

Experts|

* T. Berry Brazelton
* Rudolf Dreikurs
* David Elkind
* Jo Frost
* Haim Ginott
* Thomas Gordon
* Alan E. Kazdin
* Truby King
* Annette Lareau
* Penelope Leach
* William Sears
* B. F. Skinner
* Benjamin Spock

Organizations|

* Families Need Fathers
* Mothers Apart from Their Children
* Mothers' Union
* National Childbirth Trust
* National Parents Organization
* Parent–teacher association
* Parents Against Child Sexual Exploitation

* v
* t
* e

Reproductive health

Rights|

* Compulsory sterilization
* Contraceptive security
* Genital integrity
* Circumcision controversies
* Genital modification and mutilation
* Intersex

Education|

* Genetic counseling
* Pre-conception counseling
* Sex education

Planning|

* Assisted reproductive technology
* Birth control
* Childfree/Childlessness
* Parenting
* Adoption
* Childbirth
* Foster care
* Safe sex

Health|

* Men's
* Women's
* Vulvovaginal
* Research
* Self-report sexual risk behaviors

Pregnancy|

* Abortion
* Birth spacing
* Maternal health
* Obstetrics
* Options counseling
* Pregnancy from rape
* Pregnant patients' rights
* Prenatal care
* Teenage pregnancy
* Preteen pregnancy
* Unintended pregnancy

Medicine|

* Andrology
* Genitourinary medicine
* Gynaecology
* Obstetrics and gynaecology
* Reproductive endocrinology and infertility
* Sexual medicine

Disorder|

* Disorders of sex development
* Infertility
* Reproductive system disease
* Sexual dysfunction
* Sexually transmitted infection
* Clinic

By country|

* China
* India
* Iran
* Ireland
* Pakistan
* Philippines
* Singapore
* United Kingdom
* Teen
* United States
* Teen pregnancy
* Birth control

History|

* Birth control movement in the United States
* History of condoms
* Social hygiene movement
* Timeline of reproductive rights legislation

Policy|

* One-child policy
* Two-child policy
* Financial
* Baby bonus
* Bachelor tax
* Child benefit
* Tax on childlessness

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