AEI Tax Brief: Child Tax Credit Options

Alex Brill | AEI Tax Brief

Current Policy
Under current law, a taxpayer can claim a Child Tax Credit (CTC) of up to $1,000 for each qualified child under 17 years of age. The credit amount is dependent on the taxpayer’s modified adjusted gross income. If the CTC is greater than the amount of taxes owed, taxpayers may be eligible for the partially refundable Additional Child Tax Credit.

Reform Options
I used the open source Tax-Calculator to simulate the effect of changes to the CTC. I simulated three scenarios:
1) increasing the CTC to $1,500, 2) decreasing the CTC to $500, and 3) eliminating the CTC.

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