The 2024 Child Tax Credit (CTC) has been a hot topic, with discussions and legislation surrounding its expansion and potential benefits for families. This article will delve into the details of the CTC as it stands for the tax year 2024, including eligibility criteria, benefits, and the current state of the proposed expansions.
Understanding the Child Tax Credit
The Child Tax Credit is a federal tax credit that aims to assist families with the costs of raising children. For the tax year 2024, the CTC is worth $2,000 per qualifying child. However, this amount is subject to change based on inflation adjustments for future tax years.
Eligibility Criteria
To qualify for the full CTC in 2024, a child must be under the age of 17 by the end of the calendar year and must be a U.S. citizen, national, or resident alien. Additionally, the child must be related to the taxpayer claiming the credit (as a son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of these). The child must also have lived with the taxpayer for more than half the year and must not provide more than half of their own financial support.
Benefits
The current CTC offers a partially refundable credit, meaning that a portion of the credit can be refunded even if the taxpayer owes no taxes. The refundable amount is $1,700 per qualifying child for the tax year 2024.
Proposed Expansion and Legislative Challenges
Efforts have been made to expand the CTC, particularly with the Tax Relief for American Families and Workers Act of 2024, which was passed by the U.S. House of Representatives on January 31, 2024. This bill proposes to increase the amount of the credit available as a refund incrementally, raising it to $1,800 for 2023 tax returns, $1,900 for the following year, and $2,000 for 2025 tax returns.
However, as of May 13, 2024, the proposed expansion has been stalled at the Senate level, with Senate GOP opposition citing concerns about certain provisions. The fate of the expansion remains uncertain, and it is unclear if it will be passed in time for the 2024 tax season.
Conclusion
The 2024 Child Tax Credit offers significant benefits for families, particularly those with lower incomes. While the base credit remains at $2,000 per qualifying child, efforts to expand its benefits are ongoing. As the legislative process continues, it’s essential for taxpayers to stay informed about changes to the CTC to ensure they can take full advantage of the available tax benefits.
Disclaimer: The information provided above is not meant to be legal or tax advise. You should consult your CPA and attorney to determine the best course of action for your situation.
Mitzi E. Sullivan, CPA is a cloud based professional services provider
specializing in cloud accounting.