Updated on January 4, 2024
This article provides information on the Child Tax Credit Increase 2024, outlining the expected rise in the US Child Credit and offering a comprehensive update. The Internal Revenue Service has introduced specific changes in the inflation adjustment for the child tax credit, benefiting lower-income taxpayers. These federal tax credits play a vital role in extending financial support to American taxpayers with children under 17 years old. For more details on the anticipated increase in the Child Tax Credit in 2024, continue reading.
Child Tax Credit Increase 2024
The Child Tax Credit serves as financial assistance, providing support to taxpayers for the additional cost of raising children. These federal benefits grant $2,000 per qualifying dependent. In 2024, the Child Tax Credit is set to increase in response to inflation, available as a refundable tax credit on the tax bill.
The IRS Child Tax Credit aids low-income taxpayers and their households by addressing the extra expenses associated with raising children. For 2024, the credit will see an increase, with the new adjustment reaching up to $1,700. This substantial investment amounts to billions of dollars annually.
What is Child Tax Credit?
The Child Tax Credit (CTC) is a nonrefundable tax credit designed to provide financial support to taxpayers with children under the age of 17. These credits work to reduce the tax bill, potentially eliminating it altogether for some recipients. Additionally, certain taxpayers may qualify for a partial refund through the Additional Child Tax Credit.
To qualify for the Child Tax Credit Increase in 2024, taxpayers and their children must meet specific eligibility criteria. Income thresholds also play a role in determining eligibility for the CTC. In 2023, the CTC, valued at $2000, is available to eligible children if the taxpayer’s gross income is $400,000 for married filers and $200,000 for other filers. Additionally, the Additional Child Tax Credit provides an extra benefit, amounting to $1,600.
Expected Child Credit Increase in the US?
Anticipated for the upcoming fiscal year, the Child Tax Credit Increase in 2024 is under consideration by the Internal Revenue Service. The proposed child tax credit is expected to be $2,000 per qualifying child, with an additional $1,700 potentially refundable for extra children. To be eligible for the child tax credit in 2024, certain qualifications must be met when filing the tax return. These include the child’s age, which must be under 17 years, and a legal relationship between the child and the taxpayer.
In the 2024 tax year, the refundable credit will rise to $1.7K, provided to eligible taxpayers with an additional $100 per qualifying child. These Child Tax Credits (CTCs) adhere to federal guidelines administered by the IRS. To qualify for the CTC, the child must meet the following criteria:
- The child should be under the age of 17 years.
- The child must be the taxpayer’s son, daughter, stepchild, or have any other qualifying relationship, such as a descendant of a grandchild.
- Children should not receive more than half of their financial support during the year.
- The taxpayer needs to claim the child as a dependent on their tax return.
- The recipient must not file a joint income tax return with their spouse, and estimated tax should be paid in a fiscal year.
These key points about the Child Tax Credit also vary based on the rules implemented by different states with their own expanded CTC. For the year 2024, the credit will be valued at $7,830 for three qualifying children (up from $7,430), $6,960 for two qualified children, $4,213 for a single qualifying child, and $632 for nonqualifying children.
The Child Tax Credit Increase aims to bolster federal benefits with an enhanced payment of $300, contributing to improved financial assistance for over three million children, according to government statistics, helping them escape poverty.