One of the big changes under the new code and candidly not spoken about in the press as much as the change in the “standard deduction” is the elimination of all personal exemptions under the new code. This has a potential substantial impact on larger, middle class families. These are worth $4,050 in 2017 per exemption and might offset the doubling of the standard deduction.
The child credit will now be $2,000 per qualifying child and up to $1,400 will be refundable – there are substantially higher thresholds for eligibility- good news for the middle and upper class. These amounts are now $400,000 ($200,000 single) up from $110,000 ($75,000) under 2017 law. This impacts children under age 17
The Act also provides a $500 nonrefundable credit for qualifying dependents other than children, and the dependent care credit, adoption credit and the ability to exclude up to $5,000 of gross income annually for employer-provided dependent care remains on the tax code books for 2018
We move to business matters in our next blog. We will start with an overview on business tax rates and important changes