How Does the Child Tax Credit Work?
The Child Tax Credit provides tax-based assistance to families with children. Families can claim up to $1,000 for each child, reducing the amount they owe in taxes, and under certain circumstances, increasing the amount of their yearly tax refund. The CTC provides families with additional funds that can help them cope with the rising costs of maintaining a household and raising children. Yet due to the way the credit is structured, low-income families are more likely than middle-income families to be denied the full benefits of the credit. The credit has two components: 1. Basic Child Tax Credit (Non-Refundable). The basic CTC provides an offset against tax liability of up to $1,000 per child under the age of 17. This amount is not adjusted for inflation. This credit is only available to families with tax liabilities, so it provides little or no benefit to lower-income families who owe little to no money in federal income taxes. 2. Additional Child Tax Credit (Refundable). Families tha
