If you haven’t filed your tax return yet this year, time is running out to do so. Tax day is April 15th for him and he has about a week left. If you’ve been waiting for the Child Tax Credit Expansion Act to pass, there’s no need to delay any longer. The money you are eligible for can be deferred. We’ll explain what’s going on and what to do.
This story is part of 2024 taxesCNET covers the best tax software, tax tips, and everything else you need to file your return and track your refund.
The child tax credit is partially limited, both the current tax credit and the one pending in the Senate. Refundable, which means that even if you haven’t paid taxes, you can still get a refund for some of your credits. The remainder is non-refundable, so that portion of the tax credit can only be used against taxes owed.
Find out below why you need to file now, whether you qualify for the 2024 Child Tax Credit, and how much you could receive. For more tax tips, here’s the best tax software and when you can get your child tax credit refund this year.
How much is the child tax credit in 2024?
As of December 31, 2023, the per-child tax credit is capped at $2,000 per child under 17 years of age. Only a portion of that will be reimbursed this year (up to $1,600 per child).
The child tax credit expansion for the 2021 tax year was $3,600 for children 5 and under and $3,000 for children 6 to 17, but that is no longer the case. The age requirement was also temporarily extended to under 18 on December 31st, but this has also been removed.
Who is eligible for the Child Tax Credit?
To qualify for this year’s tax break, you and your family must must meet these requirements:
- you have Modified Adjusted Gross Income, or MAGI; Up to $200,000, or up to $400,000 if filing jointly.
- The child applying for credit was under 17 years oldDecember 31, 2023.
- They have a valid social security number.
- They are your legal children, stepchildren, foster children, siblings, half-brothers, half-sisters, or descendants of any of these categories (grandchildren, nieces, nephews, etc.).
- They do not contribute more than half of their own financial support in the relevant tax year.
- They live with you for more than half a year.
- You claim them as a dependent on your tax return.
- You are a U.S. citizen or resident alien.
go to IRS website For more information.
If your MAGI exceeds the income limit, the amount of Child Tax Credit you receive will be reduced by $50 for every $1,000 you exceed the limit. For example, if as an individual she has her MAGI of $210,000, she can claim $1,500 for each qualifying child.
The child tax credit will be phased out completely, increasing to $240,000 for individuals and $480,000 for married couples filing jointly.
Note: If you search online for information about the Child Tax Credit, you may find more information about the 2021 Expanded Tax Credit, so double check that you’re viewing the most up-to-date information.
Mark Steber, Chief Tax Information Officer jackson hewittstates that many government sites keep historical information alive “to recoup tax dollars.”
Will Congress expand the Child Tax Credit in 2024?
As part of a massive COVID-19 aid package, Congress temporarily expanded the child tax credit in 2021. Contributed to pushing child poverty to record lows. Congress did not extend the expanded credit in 2022, and the credit returned to pre-pandemic interest rates.
If approved, the new rules for the $2,000 child tax credit would be more modest and cover three tax years: 2023, 2024, and 2025. That means, if approved, you’ll be able to claim the expanded deduction when you file your 2023 tax return this tax season.
The new child tax credit would partially continue as currently proposed. Refundable (So even if you haven’t paid any taxes, you can still get a refund on some of the credits.) And with the new rules, the maximum refundable amount per child is $1,600 for the 2023 tax year. $1,800, increasing to $1,900 in 2023. In the 2024 tax year, he will have $2,000 and in the 2025 tax year, he will have $2,000. However, the amounts in 2024 and her 2025 will be adjusted for inflation.
After excluding the refundable amount ($200 for tax year 2023), the remaining $2,000 is non-refundable, so the tax credit can only be used against taxes owed. After your tax liability reaches $0, you can’t receive any additional money.
Should I wait to file my tax return or file it now?
The amendment passed the House, but it is unclear whether the Senate will approve the bill. You may be wondering whether you should hold off on filing your tax return until the bill is actually signed into law.
“There’s no need to wait,” IRS Commissioner Daniel Werfel said.. In testimony before the House Ways and Means Committee on February 15, Mr. Werfel said, “Taxpayers should not wait until this bill allows them to file their tax returns. will respond. They are not going to issue a refund.” You may need to take additional steps, such as filing an amended return.
On February 21st, IRS releases statement “Adjustments will be made automatically for taxpayers who have already filed, so eligible taxpayers will not need to take any additional action.”
Lisa Greene-Lewis, a certified public accountant and tax expert at Intuit, the company that developed TurboTax, said there are other credits available to parents besides the child tax credit, such as earned income taxes, so it’s a good idea to file now. He said there is a reason. credit.
Always consult a tax advisor regarding your individual tax needs.
How do I claim the Child Tax Credit?
You can claim the child tax credit by entering the eligible child on your tax return. Form 1040 and I’ll attach the completed one Schedule 8812, Credit for Qualified Children and Other Dependents.
What if the credit is more than the tax owed?
This year’s child tax credit is not completely non-refundable. This means that if your tax bill exceeds the amount you receive from the credit, the difference will be forfeited.
You may still be able to claim additional child tax credit; This will reimburse you up to $1,600 per child. (Fill out the worksheet to see if you qualify for the additional child tax credit. IRS Form 8812. )
If you are paying childcare fees, you may also receive childcare fees. Child and Dependent Care Credit. Depending on your situation, you can claim between 20% and 35% of your childcare fees.
The maximum amount you can claim is $3,000 for each child under 13 or a dependent with a disability, and $6,000 for two or more.
To qualify for this credit, you must have an income, and your spouse or family member cannot provide care for your child.
Other federal income tax benefits available to families include: adoption credit, educational unit And that income tax credit.
Is there a state child tax credit?
Yes: 16 states, including Arizona, are implementing their own child tax credits this season. California, colorado, idaho, maine, maryland, MassachusettsMinnesota, new jerseynew mexico, new york, oklahomaOregon, Utah, vermont state and Wisconsin.
Please check requirements and benefits as they vary. your state tax portal For more information. For more information, check out our essential cheat sheet for filing your 2024 taxes and how to track your refund with the IRS.
