Child Tax Credit
TaxGlossary term
Definition
A federal tax credit that reduces taxes owed for each qualifying child under age 17. The credit directly lowers your tax bill dollar-for-dollar and may be partially refundable if it exceeds the taxes you owe.
Related terms
- Tax CreditA dollar-for-dollar reduction in taxes owed. More valuable than deductions, which only reduce taxable income. Examples include Child Tax Credit and Earned Income Tax Credit.
- Tax DeductionAn expense that can be subtracted from gross income to reduce taxable income. Common deductions include mortgage interest, student loan interest, and charitable contributions.
Get advice that uses your real numbers
Warren reads your accounts and explains what terms like this mean for your plan. Free to start, no credit card required.