Child Tax Credit 2024 – Amount, Eligibility, Changes and how to claim?

The Child Tax Credit (CTC) has experienced substantial modifications over the past few years. The proposed changes would increase the maximum refundable amount per child to $1,700 in 2024.

Child Tax Credit 2024

The Child Tax Credit (CTC) for 2024 has been the subject of recent bipartisan legislation and proposed changes. The House has approved a bill that includes a temporary expansion of the CTC for three years, with adjustments for inflation in 2024. 

The proposed changes would increase the maximum refundable amount per child to $1,700 in 2024. The CTC is available for children under the age of 17 with a Social Security number, and the maximum refundable amount per child is set to increase.

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Important Changes in CTC for 2024

As of today, there are no confirmed major changes to the Child Tax Credit (CTC) for 2024. The credit will remain at $2,000 per qualifying child, with $1,700 refundable, similar to 2023. However, some important points to consider:

Inflation Adjustments: 

  • While the base credit amount and income phase-out thresholds haven’t officially changed, the IRS will adjust these for inflation in 2024. 
  • This means you can expect slightly higher credit amounts and adjusted income thresholds compared to 2023. The exact numbers will be announced later in the year.

Pending Proposals for Expansion: 

While the current provisions stand for 2024, proposals for future modifications are being debated.

The House of Representatives passed a bipartisan bill in December 2023 proposing changes like:

  • Increasing the refundable amount: The proposed changes would increase the maximum refundable amount per child to $1,900 for tax year 2024.
  • Prior-year income option: Allowing taxpayers to choose their income from the current or prior year for calculating the credit.
  • Eliminating the “marriage penalty”: For some married couples claiming the credit.

Child Tax Credit

Eligibility Requirements for the Child Tax Credit

To claim the Child Tax Credit (CTC) in 2024, you must meet the following eligibility requirements:

For You:

  • Be a U.S. citizen or resident alien with a valid Social Security number.
  • You are ineligible to be listed as a dependent on another person’s tax return.

For Your Child:

  • Be under the age of 18 at the end of the tax year (December 31st, 2024).
  • Be one of the following to you:
    • Son, daughter, stepchild, eligible foster child, grandchild, niece, nephew
    • Brother, sister, stepbrother, stepsister, half-brother, half-sister (if you live with them and pay more than half their support for the year)
  • Have a valid Social Security number that is valid for employment in the United States.
  • Live with you for more than half the year (exceptions apply for temporary absences, births, and deaths).
  • make annual contributions of less than half of their own funds.
  • Your income may affect the amount of the credit you receive. The credit begins to phase out for higher earners based on your filing status and number of children. 

Claiming the Child Tax Credit (CTC) in 2024

Steps to claim the CTC:

Check eligibility:

  • Make sure your child meets all the qualifications outlined earlier in this conversation. 

Gather documentation:

  • You’ll need:
    • Your Social Security number and filing status.
    • Your child’s Social Security number and date of birth.
    • Proof of income (W-2 forms, 1099s, etc.).
    • Proof of residency with your child for more than half the year (if applicable).
    • Documentation for any special circumstances affecting eligibility (e.g., divorced parents).

Choose your filing method:

  • You can file electronically, use tax software, or file paper forms. The IRS encourages electronic filing for accuracy and speed.

Complete Form 1040 and Schedule 8812:

  • Use Form 1040 or 1040-SR to file your federal income tax return.
  • Attach Schedule 8812, “Credits for Qualifying Children and Other Dependents,” to complete the CTC calculations.
  • Schedule 8812 will guide you through determining your eligibility, credit amount, and refundable portion.

Submit your tax return:

  • File electronically or mail your paper return along with Schedule 8812 and supporting documents by the deadline (April 15, 2024, or October 15, 2024, with an extension).

Child Tax Credit Amount and Refundability in 2024

Here’s the information about the Child Tax Credit (CTC) for tax year 2023, filed in 2024:

Credit Amount:

  • $1700 per qualifying child under the age of 18 at the end of the tax year (December 31st, 2024).
  • Inflation adjustment expected in 2024,so the final amount may be slightly higher.

Refundability:

  • Up to $1,700 per child is refundable. This means even if you owe little or no income tax, you can receive the difference as a refund.
  • Advance CTC Payments: If you received advance CTC payments in 2023, it will affect your final credit amount when you file your tax return in 2024. The IRS will provide instructions on how to reconcile these payments.
  • Legislation is pending in Congress that could increase the refundable amount and make other changes to the CTC.

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