Child Tax Credit Changes 2024: What Are Expected Child Tax Credit Changes in USA?

Updated on February 2, 2024

Learn all about the anticipated Child Tax Credit changes in 2024. This tax benefit supports eligible families with dependent children, helping reduce their tax bills. In 2024, expect significant expansions and higher rates for qualifying children. Explore more details on these changes and what to expect in this article.

Child Tax Credit Changes 2024

The Child Tax Credit, established under the Federal Taxpayer Relief Act 1997, aims to assist lower-income taxpayers. In 2021, the American Rescue Plan extended the CTC, raising taxes by $3K to $3.6K per child, depending on age, with a fully refundable credit.

This fiscal year, taxpayers can receive $2,000 per qualifying child under 17, with a non-refundable credit. Filing 2024 taxes may qualify for a partial refund of $1,600 as the additional child tax credit. The Child Tax Credit Changes amount adjusts based on specific modified adjustments tied to the taxpayer’s gross income.

What Are Expected Child Tax Credit Changes in the USA?

In 2024, changes to the Child Tax Credit will depend on your annual gross income and inflation. To claim the CTC, include your children or dependents on Form 1040 when filing your income tax, and attach Schedule 8812 for each qualifying child.

On January 19, 2024, the federal committee approved the Tax Relief for Americans Families and Workers Act. This act aims to expand the CTC, setting it at $2,000 per child with a refundable portion of $1,600. The changes involve adjusting the per-child calculation and considering multiple earning sources, exceeding $2,500 by 15%.

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The anticipated modification is set to take effect in the current tax year, bringing a maximum refundable credit increase of $1,800 for 2023 and a further increase to $2,000 for 2024. The overall Child Tax Credit will be adjusted to account for inflation. Taxpayers must file their income tax for 2023 by April 15, 2024, or obtain the necessary extension.

Changes to the Child Tax Credit are influenced by the Internal Revenue Service and the prevailing inflation rate. Federal authorities will make adjustments based on the rising consumer price index, impacting the credit amount. This credit provides an additional cost of living benefit, varying with the child’s age and the taxpayer’s annual gross income.

Who qualifies for the Child Tax Credit?

American taxpayers can claim the Child Tax Credit (CTC) for each eligible child meeting federal criteria. To qualify for these Child Tax Credit Changes, individuals must have a valid Social Security Number from their employment. The Internal Revenue Service provides this credit assistance under the following requirements:

  1. The dependent must be under 17 years old at the end of the current fiscal year.
  2. They should not provide more than half of their own support during the year.
  3. The children must live with the person claiming the CTC.
  4. They must be claimed as a dependent on the income tax return.
  5. The individual needs to be a U.S. permanent citizen or a U.S. resident alien.

Meeting these federal requirements is necessary to qualify for the Child Tax Credit. Additionally, individuals must file their income tax return with the Internal Revenue Service. In 2024, changes to the Child Tax Credit will be influenced by the rising cost of living and inflation, determined by the increased consumer price index.

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