The 2024 tax season is almost over, and the House and Senate are still working on a plan to increase payments to low-income families with children.
This bill, titled the Tax Relief for American Families and Workers Act of 2024, would increase the maximum refundable amount per kid for the child tax credit for the next three years, thereby expanding the program. By the end of the first year, the new enhanced credit would have helped 16 million low-income children, according to the Center on Budget and Policy Priorities.
Expected Child Tax Credit
According to CNET, this proposal would alter the $2,000 child tax credit for 2023, 2024, and 2025. This implies that you will be eligible to claim the increased credit when you pay your taxes for 2023.
The child tax credit would remain partly refundable, so you may obtain a refund even if you owed no tax. The maximum child refund would rise from $1,600 under the new guidelines. It would rise to $1,800 in 2023, $1,900 in 2024, and $2,000 in 2025. Inflation would affect 2024 and 2025.
After the refundable amount ($200 for tax year 2023) is reached, the remaining $2,000 is nonrefundable. You may only utilize the tax credit against taxes you owe. The previous tax cut had a cap of $1,600 per kid for refundable tax credits.
Applicable Qualifications
If you and your family want to take advantage of the tax reduction this year, you have to satisfy these conditions:
- You qualify if your modified adjusted gross income (MAGI) is $200,000 or below (or $400,000 if you're filing as a married couple).
- Credit is claimed for a kid under 17 on December 31, 2023.
- The child's Social Security number is current and legitimate.
- The claim must be for a legally acknowledged kid, stepchild, foster child, sibling, half-brother or half-sister, or a descendant of one of the categories.
- Only half of their financial assistance was provided in the relevant tax year.
- The child lived with you for over half the year.
- Your tax return lists them as a dependant.
- You are an American citizen or resident alien.
