Don’t wait any longer if you’ve been hoping for a child tax credit extension bill being passed. We’ll go over what’s happening and what you ought to do.
The present child tax credit and the one that is stuck in the Senate are both partially refundable, which means that you can receive a refund for a portion of the credit even if you do not owe any taxes.
You can only apply the remaining portion of the tax rebate against the taxes you owe because it is nonrefundable. However, in order to claim it, you must file your tax return.
See below for the reasons you should file now, if you haven’t already, if you qualify regarding the child tax credit in the year 2024, and the potential amount of your refund.
As of December 31, 2023, the highest tax credit allowed per child is $2,000 for every child under the age of 17. This year, only a portion, up to $1,600 per child, is refundable.
The increased child tax credit for 2021 was $3,600 for kids under five and $3,000 for those between the ages of six and seventeen. That’s not the situation anymore. On December 31, the minimum age was also briefly increased to be under 18, but that has already been removed.
Child Tax Credit 2024: Eligibility Criteria
This year’s tax cut is contingent upon you as well as your family fulfilling the following requirements:
1. You meet the eligibility requirements if your modified adjusted gross income (MAGI) is $200,000 or less, or $400,000 if you’re filing jointly.
2. On December 31, 2023, the child for whom you are requesting credit was younger than 17 years old.
3. Their Social Security number is up-to-date.
4. They may be your sibling, stepchild, foster child, legally recognized child, half-brother, half-sister, or a decedent of one of these (such as a grandchild, niece, or nephew).
5. In the applicable tax year, they have given no more than 50% of their own funds.
6. They have spent more than half the year residing with you.
7. On your tax return, you are listing them as a dependant.
8. You are a resident alien or a citizen of the US.
What happens if the credit exceeds my tax liability?
This year’s child tax credit isn’t totally nonrefundable. This implies that you will lose the difference if your tax burden is more than the amount you receive from the credit.
The extra child tax credit, that reimburses up to $1,600 per child, may still be available to you. (Fill out the IRS Form 8812 worksheet to check if you are eligible for the extra child tax credit.)
You can also be eligible for the child as well as dependent care credit if you paid for crèche. You may deduct anywhere from 20% – 35% of the child care costs, depending on your specific situation.
For one child under the age of thirteen or a person who is dependent on a disability, the maximum claim amount is $3,000; for two or more, it is $6,000.
To be eligible for this credit, you have to be an earner and your children cannot be cared for by a family member or a spouse. Families can also take advantage of the earned income tax credit, adoption credits, and education credits as additional federal income tax advantages.
The Senate will not approve the proposed modifications in time regarding this tax season, even though the House has approved the adjustments to the child tax credit. If you have been delaying filing your taxes, you ought to submit it right now or ask for an extension.
