In the event you haven’t filed your tax return but this yr, you are operating out of time to take action. Tax Day is on April 15, which is simply over per week away. In the event you’ve been ready for a child tax credit expansion bill to get handed, do not delay any longer. You can postpone any cash you are eligible for. We’ll clarify what is going on and what it’s best 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 for those who do not owe any tax. The rest is nonrefundable, so you should use that a part of the tax credit score solely towards taxes you owe.
Discover out under why it’s best to file now, whether or not you are eligible for the kid tax credit score in 2024, and the way a lot cash you possibly can get. For extra tax suggestions, listed below are our picks for the best tax software and when you can expect to receive your child tax credit refund this yr.
How a lot is the 2024 little one tax credit score?
The utmost tax credit score accessible per child is $2,000 for every little one underneath 17 on Dec. 31, 2023. Solely a portion is refundable this yr, as much as $1,600 per little one.
For tax yr 2021, the expanded little one tax credit score was $3,600 for youngsters 5 and underneath, and $3,000 for youngsters ages six to 17. That is now not the case. The age requirement was additionally quickly prolonged to underneath 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’ve gotten a modified adjusted gross income, or MAGI, of $200,000 or much less, or $400,000 or much less for those who’re submitting collectively.
- The kid you are claiming the credit score for was underneath the age of 17on Dec. 31, 2023.
- They’ve a legitimate Social Safety quantity.
- They’re your legally acknowledged little one, stepchild, foster little one, sibling, half-brother or half-sister, or a descendant of certainly one of these classes (like a grandchild or niece or nephew).
- They’ve contributed not more than half of their very own monetary help within the related tax yr.
- They’ve lived with you for over half the yr.
- You’re claiming them as a dependent in your tax return.
- You’re a US citizen or resident alien.
Go to the IRS website for extra data.
In case your MAGI is increased 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 will let you declare $1,500 for every eligible little one.
The kid tax credit score is phased out fully at $240,000 for people and $480,000 for married {couples} submitting collectively.
Notice: In the event you search on-line for data on the kid tax credit score, you might come throughout particulars on the 2021 expanded tax breaks, so double-check that you simply’re viewing the latest data.
Mark Steber, chief tax data officer at Jackson-Hewitt, says many authorities websites maintain historic data stay “for individuals taking part in catch-up with their taxes.”
Will Congress broaden the kid tax credit score in 2024?
As a part of an enormous COVID-19 support package deal, 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 permitted, the brand new guidelines across the $2,000 little one tax credit score can be extra modest and canopy three tax years: 2023, 2024 and 2025. Which means if it is permitted you possibly can declare the expanded credit score this tax season while you file your 2023 tax returns.
As proposed proper now, the brand new little one tax credit score would proceed to be partially refundable (so, for part of the credit score you possibly can get a refund even for those who did not owe any tax) and the brand new guidelines would enhance the utmost refundable quantity per little one from $1,600 per little one 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 possibly can use the tax credit score solely towards taxes you owe — after your tax invoice hits $0, you will not get further cash.
Ought to I wait to file my tax return or file now?
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 might marvel for those who 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 mentioned, “Taxpayers mustn’t look forward to this laws to file their returns. We are going to deal with getting any further refunds to taxpayers who’ve already filed. They will not have to take further steps,” similar 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 further motion will probably be wanted by these eligible taxpayers.”
Lisa Greene-Lewis, a CPA and tax skilled at Intuit, maker of TurboTax, mentioned there are different causes to file now as a result of different credit can be found for folks past the kid tax credit score that they’ll benefit from, similar to the earned income tax credit.
All the time seek the advice of together with your tax advisor in your particular person tax wants.
How do I declare the kid tax credit score?
You’ll be able to declare the kid tax credit score by getting into your eligible youngsters 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 totally nonrefundable. That implies that in case your tax legal responsibility exceeds what you get from the credit score, you forfeit the distinction.
You should still be capable to declare the additional child tax credit, which refunds as much as $1,600 per little one. (To see for those who qualify for the extra little one tax credit score, fill out the worksheet for IRS Form 8812.)
In the event you paid for childcare, you might also 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 little one underneath 13 or a dependent with disabilities, or $6,000 for 2 or extra.
You’re required to have earned revenue to qualify for this credit score and the care in your youngsters should not have been supplied by a partner or member of the family.
Different federal revenue tax breaks accessible to households embrace adoption credits, education credits and the earned income tax credit.
Is there a state little one tax credit score?
Sure: 16 states have their own child tax credit this season, together with Arizona, California, Colorado, Idaho, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oklahoma, Oregon, Utah, Vermont and Wisconsin.
Necessities and advantages differ, so examine with your state tax portal for particulars. For extra, this is our important 2024 tax filing cheat sheet and how to track your refund with the IRS.
