“I don’t think they gave it a lot of thought,” said Steve Wamhoff, senior fellow for federal tax policy at the Institute on Taxation and Economic Policy.
Currently, all parents can take a $4,150 tax exemption for each child up to age 19 or up to 24 if the child is in college. That reduces taxable income. For someone in the upper middle-class, who faces a marginal tax rate of 25 percent, that’s a $1,038 reduction in annual federal taxes for each child.
But the GOP bill kills off exemptions. They are replaced, in part, with a larger standard deduction and a bigger child tax credit. There’s also a new $500 family tax credit for dependents, including children, who are too old to qualify for the child tax credit. Read more