The Child Tax Credit is one of the credits the U.S. government makes available to low-income families with dependent children. The CTC looks to help families lower the liabilities or taxes they owe to the government. It is a non-refundable tax credit which means it can give a tax break to a citizen but cannot enhance the tax refunds. The Internal Revenue Service makes Child Tax Credit Changes 2024 to ensure financial stability for low-income parents who are responsible for their child’s care. If the parents wish to claim the CTC for their child, they need to file their federal income tax returns. However, the IRS also provides the credit to those who generally do not file the returns.
What are the Child Tax Credit Changes 2024?
Due to the high living economy, many children in the U.S. live under the federal poverty line. With the annual CTC, the U.S. government aims to eliminate child poverty in the nation. During the American Rescue Plan Act in 2021, the CTC was significantly enhanced for each child who qualifies for the CTC. Throughout this, the credit was raised to $3,600 for every child under the age of 6 and to $3,000 for every child between 7 to 17 years of age. However, the IRS has now implemented the major Child Tax Credit Changes 2024. Under these changes, eligible parents can now receive up to $2,000 per qualifying child.
In 2024, this remains the same as the previous financial year. Apart from that, the refundable portion or the Additional Child Tax Credit has also been changed in 2024. During the American Rescue Plan Act in 2021, the refundable segment of the CTC was fully refundable. The citizens who do not owe any taxes to the government were also eligible to fully claim the ACTC. However, as of 2024, the IRS has changed the ACTC to $1,600 per qualifying child. Parents who want to claim the CTC, their dependent may need to meet certain eligibility requirements set by the IRS itself.
Child Tax Credit Changes 2024 Quick Details
| Title | Child Tax Credit Changes 2024 |
| Country | The USA |
| Name of the Credit | Child Tax Credit |
| Authorized by | Internal Revenue Service |
| Governed by | The Federal Government |
| Category | Government aid |
| Purpose | To provide financial assistance |
| Applicable for | Parents with dependent children |
| Year | 2024 |
| Official website | irs.gov |
Child Tax Credit Changes 2024 Income Requirements
Along with the credit amount, the income limit for the tax filers is also changed under the Child Tax Credit Changes 2024. As of 2024, for taxpayers who are claiming the CTC as eligible individuals, their adjusted gross income is required to be below $200,000. Alternatively, if a married couple opts to file a joint claim of CTC for their dependent, the IRS has set an income limit for them at $400,000.
To receive the full credit amount, the claimants may need to maintain their adjusted gross income below these set limits. However, in any instance the income exceeds, the child tax credit amount may be reduced by $50 for each $1,000 above the income. For example, if an individual has a net income of $210,000, their credit amount may be reduced by $500 as per the guidelines ($10,000/$1,000 * $50 = $500).
Child Tax Credit Changes 2024 Eligibility
Parents whether they’re filing tax returns or not can receive up to $2,000 under the Child Tax Credit Changes 2024. For that, their dependent may need to meet some eligibility requirements that are mentioned in the following points:
- The citizenship and permanent residency in the United States of America is required for the dependent child or children.
- If claiming the CTC in 2024, the child should be under 17 years of age at the end of 2023.
- The dependent can be a son, daughter, brother, sister, stepchild, stepbrother, stepsister, eligible foster child, half-brother, half-sister, grandchild, niece, nephew, or any other.
- Only the child who has lived with the claimants for more than half of the year is eligible for CTC.
- Claimants must properly claim the child as their dependent while filing the federal income tax returns.
- The child must not have provided more than half of his/her income support in the previous financial year.
- As for the claimants, they must not exceed their income limit to claim full credit amount. For individuals, it is $200,000 and for the married couple who claim the credit jointly, it is $400,000.
Child Tax Credit Changes 2024 Latest Updates
- Apart from the CTC, there are other credits that eligible taxpayers can claim from the Internal Revenue Service. Such as Earned Income Tax Credit (EITC), Education Credit, Child and Dependent Credit, and Adoption Credit. To get the benefits of the Child Tax Credit Changes 2024, citizens have the option to fill out Form 1040. It is also called U.S. Individual Income Tax Returns.
- In addition to this, they also need to attach Schedule 8812 while filing tax returns. Generally, the Schedule 8812 is used to calculate the additional child tax credit. At present, the IRS disburses the ACTC in mid-February along with the EITC. For more information, eligible citizens can also visit the official website of the IRS.
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