The Tax Cuts and Jobs Act (TCJA), enacted in 2017, caused vital modifications to the USA federal earnings tax system. Among the many numerous provisions, modifications to the usual deduction, youngster tax credit score, and dependent care credit score had notable impacts on households, together with these headed by single dad and mom. These modifications, whereas not explicitly focusing on single dad and mom, altered the tax liabilities of this demographic attributable to their particular monetary circumstances and reliance on sure deductions and credit.
The usual deduction practically doubled beneath the TCJA, doubtlessly decreasing the tax burden for some single dad and mom who beforehand itemized deductions. Nonetheless, the elimination or limitation of sure deductions, such because the state and native tax (SALT) deduction, could have offset these features for single dad and mom dwelling in high-tax states. The rise within the youngster tax credit score supplied a profit to many households with kids, together with these headed by single dad and mom. Nonetheless, the supply of the total credit score was topic to earnings limitations, and the modifications to dependent care credit additionally affected the tax obligations of single-parent households counting on childcare providers to facilitate employment.
