Your children under the new tax plan

Ask NJMoneyHelp

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Q. Some of these tax changes are bad. Any more than one college student, senior in high school, 18-year-old still living at home, or elderly dependent will be more taxable than in 2017. The child care credit is only for children 16 or younger and only if you earn less than a certain amount. Am I missing something?
— Dad

A. Nope. You’re not missing anything.

You are correct in your analysis that the loss of personal exemptions can have a negative impact and actually increase one’s tax liability under the new tax law, said Gerard Papetti, a certified financial planner and certified public accountant with U.S. Financial Services in Fairfield.

It will depend on how many qualifying dependents you are eligible to claim.

Papetti said he recently prepared a comparison of a client’s tax liability under the prior law and the new tax law, and it didn’t look good.

The client, a single mother, will end up paying $2,000 more under the new law.

That’s in part because of the loss of the full deduction for state and local taxes — in this case from $23,500 to $10,000.

She would also lose two exemptions, one for herself and a second for a qualifying child, worth $8,300.

“As for the child tax credit, you are correct that the child must be under the age of 17,” Papetti said, noting that the phase-out income thresholds have been increased substantially so more taxpayers should be able to qualify for the credit.

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NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.