Be Aware of What Is True and Untrue About Taxes for Families with Children
Congress is currently discussing a possible reconciliation bill that would make far-reaching changes to the United States Tax Code. The 2017 tax cuts are set to expire, and Congress is looking at ways to increase revenues and cut spending to offset the costs of extending these cuts. There have been numerous statements and rumors about child tax credits that are going around, and some of them are simply not true. Nonetheless, families can expect there to be some potential changes in the tax landscape if any new major bill passes Congress and is signed into law by the President.
The 2017 Tax Cuts Are Set to Expire Soon
The 2017 tax cut law both increased the amount of the child tax credit and the number of taxpayers who could claim it (raising the income threshold at which the credit phases out). The expiration of the tax cuts would return the law to what it was previously because the legislation made many of its provisions subject to a sunset date. As of now, the tax cuts are set to expire at the end of this calendar year. The possible “fiscal cliff” has prompted Congress to consider extending the law, although it will not be easy to pass dramatic legislation given the slim majority in the House of Representatives.
There have been musings from administration officials and policymakers that those who have children should pay a lower tax rate than those who do not. Although there already is a child tax credit on the books, these statements may have envisioned further tax breaks to benefit parents who struggle to pay the cost of child care and raising children in today’s society. Whether there will be any increase in the child tax credit, or other deductions that families can take, included in the new tax bill remains to be seen.
There Have Been False Statements About the Child Tax Credit
The increased focus on the renewal of the child tax credit has also led to some statements that could mislead the public. For example, there have been reports that President Trump has said that those who receive child support payments cannot claim the child tax credit. Although there is no evidence that he has actually said this, such a statement would be unequivocally false if it were made.
A parent receiving child support may still claim that child on their taxes. The parent who pays child support does not automatically receive the child tax credit. Typically, the parents may agree amongst themselves in a separation agreement about who may claim the child tax credit. If the parents are unable to agree, the court will decide the status of the child tax credit. Absent an agreement or order to the contrary, the custodial parent usually gets to claim the child on their taxes. This rumor is but one example of a spate of misinformation that is circulating in the public about current and future tax rules.
Contact a New York Family Law Attorney Today
It can be hard to track the dizzying changes in tax laws. The task may become even more complex if Congress succeeds in passing a large-scale bill within the coming year. When it comes to how changes in the tax code may affect your situation as one who either pays or receives child support, an experienced family law attorney can help guide you. Contact the Mandel Law Firm to learn more about the law, whether you already have a separation agreement or court order, or you are in the process of seeking one. You can schedule a consultation by visiting our website, or by calling us today at 646-770-3868.
