UK Accounting Glossary
In the United States, a taxpayer can claim a $700 per child tax credit if he has a “qualifying child” living with him. According to the Motley Fool, the child must have a Social Security number and be:
The child tax credit is not available to taxpayers whose modified adjusted gross income exceeds $110,000. The credit will increase to $800 per child in 2009 and to $1000 per child in 2010 under the terms of the Economic Growth and Tax Relief Reconciliation Act of 2001.
In the United Kingdom, a family with children and an income below about £58,000 can claim child tax credit on top of child benefit. For those with an income below £50,000, this is worth £545 a year as a family element (£1,090 if they have a baby under 1 year old).
For those with an income below about £13,910, there is an additional £1,690 per child per year, and this is tapered away at a rate of 37% as income rises. The tax credit is “non-wastable” – i.e. it is paid whether or not the family has a net tax liability – and is paid in or out of work. Higher rates are paid for disabled children. It is integrated with the working tax credit, which also provides support for childcare costs.
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This glossary post was last updated: 13th February, 2020