Though the dependent exemption has been reduced to zero beginning January 1, 2018, the rules for determining dependent status are still used to determine eligibility for the updated child tax credit and the new credit for other dependents.
Tax preparers will still need to determine dependency status when preparing tax returns for tax year 2018.
The Credit for Other Dependents is a flat $500 nonrefundable credit that applies to all dependents that do not qualify for the child tax credit. The credit has a phase out for single filers beginning at $200,000 of adjusted gross income ($400,000 for joint filers).
The child tax credit has been changed in multiple ways:
- the credit is increased from $1,000 per qualifying child to $2,000 per qualifying child
- the refundable portion is now $1,400
- the credit has the same phase out as for the Credit for Other Dependents above
- the child must have a valid SSN to qualify for the child tax credit