The invoice to expand the child tax credit remains to be stalled within the Senate. With lower than a month left till Tax Day, you could surprise if it is time to file your taxes as an alternative of ready on an unsure invoice, or when you ought to wait a bit longer when you’re claiming the credit score. We’ll make it easier to discover out what is going on and what you need to do.
The kid tax credit score — each the present credit score and the one stalled within the Senate — is partially refundable, that means that for part of the credit score you will get a refund even when you do not owe any tax. The rest is nonrefundable, so you should utilize that a part of the tax credit score solely towards taxes you owe. We’ll clarify the necessities that should be met to be eligible for the kid tax credit score in 2024.
Discover out beneath whether or not you need to wait to file, when you’re eligible for the kid tax credit score in 2024 and the way a lot cash you could possibly get. For extra tax ideas, listed below are this year’s filing deadlines and our picks for the best tax software. This is when you can expect to receive your child tax credit refund this yr.
How a lot is the 2024 youngster tax credit score?
The utmost tax credit score accessible per child is $2,000 for every youngster beneath 17 on Dec. 31, 2023. Solely a portion is refundable this yr, as much as $1,600 per youngster.
For tax yr 2021, the expanded youngster tax credit score was $3,600 for youngsters 5 and beneath, and $3,000 for youngsters ages six to 17. That is not the case. The age requirement was additionally quickly prolonged to beneath 18 on Dec. 31, however that is additionally gone.
Who’s eligible for the kid tax credit score?
To be eligible for the tax break this yr, you and your loved ones must meet these requirements:
- You have got a modified adjusted gross income, or MAGI, of $200,000 or much less, or $400,000 or much less when you’re submitting collectively.
- The kid you are claiming the credit score for was beneath the age of 17on Dec. 31, 2023.
- They’ve a sound Social Safety quantity.
- They’re your legally acknowledged youngster, stepchild, foster youngster, sibling, half-brother or half-sister, or a descendant of considered one of these classes (like a grandchild or niece or nephew).
- They’ve contributed not more than half of their very own monetary assist within the related tax yr.
- They’ve lived with you for over half the yr.
- You might be claiming them as a dependent in your tax return.
- You’re a US citizen or resident alien.
Go to the IRS website for extra info.
In case your MAGI is greater than the revenue limits, the quantity of kid tax credit score you obtain will lower by $50 for each $1,000 above the restrict. For instance, a MAGI of $210,000 as a person would can help you declare $1,500 for every eligible youngster.
The kid tax credit score is phased out fully at $240,000 for people and $480,000 for married {couples} submitting collectively.
Word: When you search on-line for info on the kid tax credit score, you could come throughout particulars on the 2021 expanded tax breaks, so double-check that you just’re viewing the newest info.
Mark Steber, chief tax info officer at Jackson-Hewitt, says many authorities websites preserve historic info stay “for individuals taking part in catch-up with their taxes.”
Will Congress increase the kid tax credit score in 2024?
As a part of an enormous COVID-19 assist bundle, Congress in 2021 quickly expanded the kid tax credit score, which helped drive child poverty to a record low. Congress did not prolong the expanded credit score in 2022, and the credit score returned to its pre-pandemic charge.
If authorized, the brand new guidelines across the $2,000 youngster tax credit score can be extra modest and canopy three tax years: 2023, 2024 and 2025. Which means if it is authorized you could possibly declare the expanded credit score this tax season if you file your 2023 tax returns.
As proposed proper now, the brand new youngster tax credit score would proceed to be partially refundable (so, for part of the credit score you could possibly get a refund even when you did not owe any tax) and the brand new guidelines would improve the utmost refundable quantity per youngster from $1,600 per youngster to $1,800 in tax yr 2023, to $1,900 in tax yr 2024 and to $2,000 in tax yr 2025, with the 2024 and 2025 quantities adjusted for inflation.
The rest of the $2,000 after the refundable quantity ($200 for tax yr 2023) can be nonrefundable, so you could possibly use the tax credit score solely towards taxes you owe — after your tax invoice hits $0, you will not get extra cash.
Ought to I wait to file my tax return or file as quickly as I can?
Though the proposed adjustments have cleared the Home, it is up within the air whether or not the Senate will approve the invoice. Till the laws is definitely signed into regulation, you could surprise when you ought to maintain off on submitting your tax return.
IRS Commissioner Daniel Werfel said don’t wait. In testimony earlier than the Home Methods and Means Committee on Feb. 15, Werfel stated, “Taxpayers shouldn’t anticipate this laws to file their returns. We are going to care for getting any extra refunds to taxpayers who’ve already filed. They will not have to take extra steps,” equivalent to submitting an amended return.
On Feb. 21, the IRS released a statement saying they may “mechanically make changes for individuals who have already filed so no extra motion will probably be wanted by these eligible taxpayers.”
Lisa Greene-Lewis, a CPA and tax skilled at Intuit, maker of TurboTax, stated there are different causes to file now as a result of different credit can be found for fogeys past the kid tax credit score that they will make the most of, equivalent to the earned income tax credit.
At all times seek the advice of along with your tax advisor on your particular person tax wants.
How do I declare the kid tax credit score?
You possibly can declare the kid tax credit score by getting into your eligible kids in your Form 1040 and attaching a accomplished Schedule 8812, Credits for Qualifying Children and Other Dependents.
What if the credit score is greater than what I owe in taxes?
The kid tax credit score this yr is not absolutely nonrefundable. That signifies that in case your tax legal responsibility exceeds what you get from the credit score, you forfeit the distinction.
You should still be capable of declare the additional child tax credit, which refunds as much as $1,600 per youngster. (To see when you qualify for the extra youngster tax credit score, fill out the worksheet for IRS Form 8812.)
When you paid for childcare, you may additionally qualify for the child and dependent care credit. Relying in your circumstances, you possibly can declare 20% to 35% of your childcare bills.
The utmost you possibly can declare is $3,000 for one youngster beneath 13 or a dependent with disabilities, or $6,000 for 2 or extra.
You might be required to have earned revenue to qualify for this credit score and the care on your kids should not have been offered by a partner or member of the family.
Different federal revenue tax breaks accessible to households embody adoption credits, education credits and the earned income tax credit.
Is there a state youngster tax credit score?
Sure: 15 states have their own child tax credit this season, together with California, Colorado, Idaho, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oklahoma, Oregon, Utah and Vermont. Others are contemplating implementing the tax break.
Necessities and advantages fluctuate, so examine with your state tax portal for particulars. For extra, here is our important 2024 tax filing cheat sheet and how to track your refund with the IRS.
