The Child Tax Credit Expansion Bill aims to benefit low-income families and children by enhancing the Child Tax Credit. The bipartisan bill, passed by the House, is set to expand the credit, potentially lifting 400,000 children above the poverty line in the first year.
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Child Tax Credit Expansion Bill
The goal of the Child Tax Credit Expansion Bill is to support low-income families and children by strengthening the Child Tax Credit.
The bipartisan legislation, approved by the House, intends to broaden the credit, potentially raising 400,000 children out of poverty within the initial year.
This expansion could benefit around 16 million children in low-income families, providing substantial financial support. The bill addresses issues limiting the credit for some poor families, such as providing no credit for a family’s first $2,500 of income.
Who is eligible for CTC Expansion?
To be eligible under the potential expansion, you’d still need to meet the following requirements:
- Relationship to the child: The child must be your son, daughter, stepchild, foster child, sibling, half-brother or half-sister, or a descendant of one of these categories (e.g., grandchild, niece, or nephew).
- Age of the child: The child must be under the age of 17 on December 31st of the tax year you are filing for.
- Citizenship/Residency: The child must have a valid Social Security number and be a U.S. citizen or resident alien for the whole year.
- Financial support: You must have provided more than half of the child’s financial support in the tax year.
- Living arrangements: The child must have lived with you for more than half the year.
- Tax filing: You must be claiming the child as a dependent on your tax return.
- Income limit (not proposed for change):
- Single filers: Must have a Modified Adjusted Gross Income (MAGI) of below $ 200,000 to receive the full credit.
- Married filing jointly: Must have a combined MAGI of below $400,000 to receive the full credit.
Proposed changes in the CTC Expansion Bill
The Child Tax Credit Expansion Bill proposes two key changes to the existing Child Tax Credit:
Increased Maximum Refundable Amount:
- Currently, a portion of the Child Tax Credit is only refundable if you owe federal income tax.
- The proposed bill aims to gradually increase the maximum refundable amount over the next three years, making the credit more accessible to low-income families who may not have enough tax liability to claim the full benefit.
| Year | Maximum Refundable Amount per Child |
| 2023 | $1,800 |
| 2024 | $1,900 |
| 2025 | $2,000 |
Maintaining the Credit Amount:
- It’s important to note that the overall credit amount for all eligible children remains at $2,000 per child under the proposed bill.
- This means the total credit value doesn’t change, but the refundable portion increases, potentially benefiting millions of children in low-income families.
What is the process for applying for the Child Tax Credit Expansion?
If passed, the changes would likely be incorporated into the existing process for claiming the Child Tax Credit through your regular tax filing:
- Gather necessary documents: This includes your W-2 forms, Social Security numbers for dependents, proof of income and expenses, and any other relevant tax documents.
- Choose a filing method: You can file electronically (e-filing), use tax software, or file a paper return by mail.
- Complete your tax return: Follow the instructions and fill out the relevant sections of the form, including claiming the Child Tax Credit on Schedule 8812.
- Submit your return: Once finished, submit your return electronically or mail it to the IRS by the deadline.
Potential Impact of the Child Tax Credit Expansion Bill
The Child Tax Credit Expansion Bill, if passed, has the potential to significantly impact both children and families in the United States.
Positive Impacts:
- Reduced Child Poverty: According to the Center on Budget and Policy Priorities (CBPP), the bill could:
- Lift 400,000 children above the poverty line in its first year.
- Provide more support to an additional 3 million children in low-income families.
- By 2025, potentially lift over 500,000 children out of poverty and support around 5 million children in low-income families.
- Increased Family Financial Stability: The additional financial resources could help families afford basic necessities like food, housing, and healthcare. This could lead to improved child well-being and development.
- Improved Educational Outcomes: Research suggests that access to financial resources can positively impact children’s educational attainment. The increased credit could support educational expenses and help children stay in school.
Go to NCBLPC Homepage To Get the Relevant Updates.
Child tax credit 2024 monthly payments