Child Tax Credit Calculator
A child tax credit calculator may not generate the same tax savings as pre tax contributions. Pre tax contributions lower reportable W2 income.
The child tax credit is worth up to $1,000 annually per qualifying child. However, the credit is phased out beginning at specified levels of Adjusted Gross Income for each filing status. A taxpayer that exceeds the income threshold loses the child tax credit.
See below to calculate how pre tax payroll deductions can preserve the child tax credit.
Child Tax Credit and Pre Taxing Calculations
The child tax credit is phased out beginning with the following Adjusted Gross Incomes per filing status:
- $110,000 - Jointly
- $75,000 - Single, or Head of Household
- $55,000 - Married filing Separately
The Child Tax Credit is limited by 5% for each dollar of Adjusted Gross Income above these amounts. Once income exceeds the specified AGI amount by $20,000, the child tax credit goes away. Throw away your calculator at this point: it does no good.
Example - For a family making $10,000 in pre tax contributions could save $500 in tax credit per qualifying child. A family of four children that falls into the impacted income range might save $2,000 in tax credits alone.
Add this to the five other ways pretaxing saves money.
