The federal child tax credit (CTC) allows eligible parents and caregivers to reduce their tax liability and may result in a tax refund. However, not everyone can claim the credit, and the credit amounts can vary for those who can.
The 2024 child tax credit is based on income, filing status, number of children, and whether the IRS considers your relative a qualifying child.
Here’s what else you need to know about the child tax credit, including how much (if anything) you can expect next year and the child tax credit challenges facing Congress.
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Overview of child tax credit
What is the child tax credit?
The child tax credit is an important tax relief that supports as many as 40 million American families each year to raise their children. CTC currently provides up to $2,000 per child under 17 under the 2017 Tax Cuts and Jobs Act (TCJA).
- If the CTC exceeds taxes owed, families can receive up to $1,700 per child in refunds for the 2024 tax year.
- Credit for other relatives: Other dependents, including those of any age, including 18 or older, and full-time students ages 19 to 24 may be eligible to receive a nonrefundable credit of up to $500 each.
There are also phase-out limits for higher-income taxpayers. For example, the child tax credit begins to phase out for a head of household earning $200,000 a year and $400,000 for married couples filing jointly.
Note: It is important to know that the child tax credit differs from the child and carer’s credit. The federal Child and Caregiver Credit can be helpful if you paid someone to care for your child or other qualifying relative so that you (and your spouse, if filing jointly) could work or look for work. Your federal income tax can be reduced by claiming the credit for child and care expenses on your tax return. For more information, see Kiplinger’s report Is summer camp deductible?
Data shows that the child tax credit has helped reduce child poverty. Unless Congress acts, the federal child tax credit is set to return to $1,000 per child. qualifying child in 2026. And the age limit for eligible children would be lowered to 16. These changes would result from the scheduled expiration of certain provisions of the TCJA. (More on that below.)
Child tax credit 2024 amount
How much will your child allowance be for 2024?
The CTC for tax year 2024 is worth up to $2,000 per qualified child under 17 years of age.
But the credit is not one in full refundable tax credit. So you can’t receive the full $2,000 back as a tax refund, even if you have a $0 tax liability and qualify for the full amount of the credit.
But there is some good news. This tax relief has a refundable part (the additional child tax credit) – more on that below. Even better, due to inflation adjustments, the refundable amount is higher for 2024 than a year ago.
- For 2024 (returns you typically file in early 2025), the refundable portion of the child tax credit is $1,700.
- For the previous tax year 2023, only $1,600 was refundable.
Note: Remember, if you’re eligible, you can get a refund of less than $1,700. This number is the maximum amount for the refundable portion. How much you are entitled to in tax deductions depends on your annual income.
If you want to know how much of the child tax credit you are currently entitled to, you can calculate this using the IRS’s interactive tax assistant tool online.
Additional child credit
What is the additional child tax credit?
The child tax credit can lower your tax liability by $2,000 per child. qualified child. However, this tax deduction cannot be refunded. This means that if you owe less than $2,000 in taxes, you will not get the unused portion of the credit as a refund.
However, the Additional Child Tax Credit (ACTC) allows you to receive up to a maximum of $1,700 per child. child as a refund for tax year 2024. You can receive the maximum amount of ACTC after your tax bill is reduced to zero.
CTC requirements
Who is entitled to the child tax credit?
Not everyone will qualify for the Child Tax Credit and your income is not the only determining factor. The IRS also has seven guidelines you and your qualifying child must meet to be eligible for the child tax credit.
The following must apply for your household to qualify:
- Age: The child must be under 17 years of age at the end of the year.
- Conditions: The child must be your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister or descendant of one of these (eg a grandchild).
- Financial support: Children cannot provide more than half of their financial support during the year.
- Residence: Children claimed under CTC must live with you for more than half the year.
- Dependent status: The child must be claimed as dependent on your tax return.
- Submission status: Dependents cannot file a joint return with their spouse unless they are filing to claim a refund of income taxes withheld or estimated taxes paid.
- Citizenship: The child must have been a U.S. citizen, U.S. citizen, or U.S. resident alien during the tax year.
CTC Income Limits
What are the income limits for child tax credit 2024?
As mentioned, the child tax credit you can expect on your refund will depend on your modified adjusted gross income (MAGIC). When your income reaches a certain limit, the credit amount will decrease or phase out completely.
The credit amount will be reduced by $50 for every $1,000 over your income limit. For example, your child tax credit will start to phase out when your MAGI exceeds:
- $200,000 for a single filer, head of household or qualifying widower.
- $400,000 for those who are married filing jointly.
- $200,000 for those who are married file separately.
What about households that don’t normally file tax returns?
Your family may be eligible for the Child Tax Credit even if you don’t earn enough income to file a tax return, but how much you get depends on your annual earnings. Just as CTC has a phase-out threshold, it also has a phase-in amount.
To qualify for the credit, families must earn at least $2,500 per year, and CTC then phases in a rate of 15% per dollar earnings above this amount. In addition, if you have three or more qualifying children, you may be eligible for other tax breaks such as Earned Income Tax Credit (EITC).
How to claim CTC
How to claim the child tax credit
You can claim the child tax credit by entering your children or dependents on your federal tax return (Form 1040). You attach a completed Schedule 8812 (Credit to qualified children and other dependents).
This IRS form also helps you determine how much of the CTC you’re eligible for and whether you’ll receive additional tax credits. (Note: If you use tax software, the system will guide you through this with prompts. If you use a tax agent, they will handle this for you.)
If you don’t normally file a tax return, you can enter your household details online using IRS Non-Filer Enrollment Tool. The tool is free and asks for information such as your name, address and social security number to determine what tax credits you are entitled to and how to issue your payments.
Eligible non-filers can also get their CTC refund through GetCTC online tool.
New update of child tax credit
What’s next for the child tax credit?
The future of the child tax credit is being discussed in Congress.
Years ago, the TCJA doubled the child tax credit to $2,000 per child. child, with a refundable portion of $1,700 in 2024 phased in from $2,500 in earned income. It also temporarily increased the qualifying age for children or dependents up to 17 years.
But without action from Congress, the child tax credit will return to $1,000 per child. child aged 16 and under when the TCJA tax credits expire. The credit would be refundable and phased in from $3,000 of earned annual income.
The failure to reach an agreement to expand the CTC has long plagued Congress.
Congress has yet to negotiate a successful bipartisan agreement to expand the child tax credit. The bipartisan tax package recently failed a procedural vote and remains stalled in the US Senate. If passed, the bill would benefit as many as 16 million children who don’t get the full credit because of their parents’ income, according to estimates by Center for Budget and Policy Priorities (CBPP).
Within the first year, the legislation was expected to lift as many as 400,000 children out of poverty, and half a million or more would have been lifted out of poverty when it was in full force.
Child tax credit: What you can do
(Image credit: Getty Images)
The child tax credit may be an important tax policy point in the presidential election in 2024. For example, Vice President and Democratic presidential candidate Kamala Harris has called for an expanded CTC. On the Republican ticket, JD Vance has also provided an increased child tax credit.
So as the election cycle progresses, stay tuned for what the candidates have to say on the issue and any changes coming through Congress.
Otherwise, make sure you claim all the tax credits and credits you’re entitled to. Consider the Child and Carer Credit and other tax credits for families that can help lower your tax liability.
Also, see what state child tax credits and deductions are available to help you and your family save money.