Child Tax Credit 2024 – Know eligibility, requirements, How to claim process, etc

What is the Child Tax Credit 2024? Who is eligible for its benefits? The child tax credit is a tax benefit program that benefits families with qualifying dependent children. It was created in 1997 under the Taxpayer Relief Act 1997. The aim of the child tax credit is to give relief to families financially and reduce their burden.

Currently, the Child tax credit gives $2000 per child, with a refund amount of 1400. On 19 January 2024, the House Ways and Means Committee approved the tax relief bills for American families and made an increase in CTC 2024. The proposed bill is planned to expand CTC, with $2000 per child along with a refundable portion of $1600

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What is the child tax credit?

The child tax credit (CTC) is a non-refundable tax credit score available to taxpayers with established children below the age of 17. The credit can lessen your tax bills on a dollar-for-dollar foundation, probably getting rid of your tax bill altogether. Some taxpayers may also be eligible for a partial refund of the credit score through what is referred to as the “extra child tax credit score” (ACTC).

To qualify, taxpayers and their children should meet certain eligibility standards that consider the child’s age, as well as their courting to the individual claiming them.

Child Tax Credit 2024

Your tax liability may be reduced with the aid of the credit score on a dollar-for-setback foundation, or it is able to be removed. Additionally, certain taxpayers may qualify for the “extra child tax credit score” (ACTC), which gives a partial go-back of the benefit. A tax credit score of as much as $2,000 can be given to taxpayers with a child under 17.

The child tax credit and the extra child tax credit score are to be had for the tax year 2023. Before either 15 April 2024 or 15 October 2024, you must submit your file of federal earnings tax return with the use of both the 1040 or the 1040-SR bureaucracy if you are submitting for an extension of tax time. One thousand 600 bucks of the credit score may be refundable for taxes submitted in 2024.

Is the Child Tax Credit refundable?

CTC is not refundable. But, the associated credit, known as the Additional Child Tax Credit, is refundable. This article covers information for each, but here are some related facts.

  • The non-refundable Child Tax Credit can lessen your tax to 0. If the amount of your credit score is higher than the taxes you owe, you don’t “get returned” the relaxation of the credit score as money back.
  • The refundable Additional Child Tax Credit can reduce your tax to 0, and if there’s credit left over, you’ll get money returned.

Requirements: Who qualifies for the child tax credit 2024?

Taxpayers can declare the child tax credit for the 2023 tax year when they record their tax returns in 2024. Generally, there are seven “checks” you and your qualifying child need to meet: age, relationship, dependent popularity, residency, monetary support, citizenship and income.

Age

Your child must be under 17

Relationship

The child you’re claiming needs to be your son, daughter, stepchild, foster child, brother, sister, half-brother, 1/2 sister, stepbrother, stepsister or a descendant of any of these people (e.g., a grandchild, niece or nephew).

Dependent status

 You have to be capable of nicely claiming the child as a dependant. The child additionally cannot document a joint tax return until they record it to claim a refund of withheld income taxes or envisioned taxes paid.

Residency

 The child you’re claiming should have lived with you for a minimum of half the year (there are some exceptions to this rule).

Financial aid

 You must have given as a minimum half of the child’s aid over the last year. In different phrases, if your qualified child financially supported themselves for more than 6 months, they’re possibly considered now not certified.

Citizenship

Per the IRS, your child needs to be a “U.S. Citizen, U.S. National or U.S. Resident should have Social Security ID.

Income

 Parents or caregivers claiming the credit also usually can’t exceed certain income requirements. Depending on how much your profits exceed that threshold, the credit score gets incrementally decreased till it is eliminated.

When to expect your CTC refund?

Returns claiming the more child tax credit score can’t be refunded by the IRS until mid-February under guidelines.

According to the IRS, beneficiaries who e-record, post a mistakes-free go back, and choose direct deposit as their refund option should have their cash deposited into their account with the aid of 27 February 2024. In trendy, wait times upward push when filing on paper. You can also study approximately the fame of your money with the aid of the use of the “Where’s My Refund” carrier given through the business enterprise. 

How to apply for CTC 2024?

To apply for the Child Tax Credit, you need to follow the given steps

Check Eligibility

 Review the eligibility standards outlined by the IRS to make sure you qualify primarily based on factors like earnings, filing status, and established children.

File a Tax Return

 If you haven’t already, report your federal tax return for the relevant tax year. This is a crucial step, as the Child Tax Credit is generally claimed on your tax return.

Provide Child Information

 Make sure to include correct and complete records about your qualifying child or children for your tax return. This includes their names, Social Security Numbers, and different applicable details.

Use IRS Forms

 Depending on your situation, use the best IRS forms to say the credit. For instance, if you’re using Form 1040 or 1040-SR, you’ll normally use the Child Tax Credit and Credit for Other Dependents Worksheet.

Calculate the Credit

 Follow the commands provided with the IRS paperwork to calculate the amount of Child Tax Credit you’re eligible for. This will rely upon your earnings, the ID of the qualifying child, and other elements.

Enter Information Correctly

 Ensure that all the records you provide are accurate and suit the information related to your tax return.

Review and Submit

 Carefully assess your tax return and any additional paperwork associated with the Child Tax Credit. Make sure the whole lot is stuffed out effectively earlier than submitting your return to the IRS.

Claiming Advance Payments

 If you’re eligible for advance payments of the Child Tax Credit, ensure you’ve given the important data to the IRS so that you can process those monthly payments.

Keep Records

 Maintain copies of your tax return and any related documentation in your records.

How to claim the CTC in 2024?

If you submit your federal tax go back (Form 1040 or 1040-SR) by 15 April 2024 or by way of 20 October 2024, if you report a tax extension, you could declare the child tax credit score and the more child tax credit score for the tax year 2023.

Schedule 8812, “Credits for Qualifying Children and Other Dependents,” needs to additionally be completed and filed along with your 1040. With the aid of this agenda, you may determine the amount of your child tax credit and, if appropriate, the amount of the partial refund that you may claim.

Usually, excellent tax software simplifies the technique of saying the child tax credit score with the aid of asking you a chain of interview questions. It even fills out the documents robotically. Through IRS Free File, you could additionally be eligible to get free tax software in case your profits are under a positive level.

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