Tax Day is approaching, with April 15 just over a week away. If you are waiting for a child tax credit expansion bill to be passed, it’s important not to delay any longer. The child tax credit is both partially refundable and nonrefundable, meaning that for a portion of the credit, you can receive a refund even if you don’t owe any taxes. The maximum tax credit available per child for 2024 is $2,000 for children under 17 on Dec. 31, 2023. To be eligible for the child tax credit in 2024, you must meet certain requirements, including having a modified adjusted gross income of $200,000 or less, or $400,000 or less if you are filing jointly.
The child tax credit amount decreases by $50 for every $1,000 above the income limit, and it phases out completely at certain income levels. It’s important to ensure you are viewing the most recent information regarding the child tax credit, as there have been changes in eligibility criteria. Congress has not extended the expanded child tax credit from 2021, and if approved, new rules around the $2,000 child tax credit would cover the tax years 2023, 2024, and 2025. The new rules would increase the maximum refundable amount per child and make the credit partially refundable.
It’s recommended not to wait to file your tax return, even if the proposed changes to the child tax credit have not been finalized by the Senate. The IRS will automatically make adjustments for those who have already filed, so no additional action will be needed for eligible taxpayers. There are other credits available for parents beyond the child tax credit that can be taken advantage of. To claim the child tax credit, you need to enter your eligible children on Form 1040 and attach a completed Schedule 8812. If the credit exceeds what you owe in taxes, you may still be able to claim the additional child tax credit or other tax credits.
Several states have their own child tax credit available for the tax season, with requirements and benefits varying by state. It’s important to check with your state tax portal for details on any state-specific tax credits. By ensuring you are aware of the eligibility criteria and filing accurately, you can maximize the tax benefits available to you and your family. Be sure to consult with a tax advisor for personalized advice on your individual tax situation.
