Get all the latest updates on the Child Tax Credit 2024: What is USA CTC Amount and How to Get it? All We Know
Child Tax Credit 2024
The Child Tax Credit offers a benefit of $2000 to individuals with a dependent child who is under the age of 17. For the 2024 fiscal year, $1600 of the CTC could potentially be refunded to the taxpayers. The CTC is a federal tax that benefits taxpayers with dependent children and assists them financially.
This year, CTC gathered attention in the news as lawmakers aimed to expand it but ultimately failed to do so before the 2024 filing season. As a result, the tax rates stay the same as the filler hurried to submit their tax return before the deadline, which was set on 15 April 2024. Those with children under the age of 17 could make a claim of up to $2000 for each child with a $1600 refund.
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What is the USA CTC Amount?
In the previous year, the Child Tax Credit amount was set to $2000 per qualifying child with modified adjusted gross income capped at $400,00 for those who are married and filing jointly, whereas for single parents, it is set to $200,000. According to the media reports, it is highly expected that with the implementation of the new budget, the CTC will be revised from $2000 to $3600 for children below the age of six years and $3000 for those who are above six years.
If your income-modified adjusted gross income exceeds the limit shared above, your child tax credit will be decreased by $50 for every $1000, surpassing the threshold. For the 2024 taxation year, the return will be filed in the forthcoming year; the CTC will be valued at $2000 per entitled child, with a possible refund of $1700 via an Additional Child Tax Credit.
Who is Eligible For the CTC?
If you reside in the USA and pay taxes annually, you can be eligible for the Child Tax Credit if you meet the eligibility norms shared below.
- It is mandatory that the dependent child be a minor (17 years old) at the end of the tax year.
- The child must be the applicant’s son, stepchild, daughter, foster child, grandchild or sibling.
- The dependent child must have resided with the applicant for at least half the year, with some exceptions.
- The recipient must have provided financial support to the child during the year.
- Most importantly, the dependent child must be a citizen of the United States or a resident alien with an authentic social security number.
- The income thresholds are applied, and the credit gradually reduces as the income surpasses the limit until it is phased out.
The Inland Revenue Service calculates CTC and ACTC by multiplying your earned income surpassing $2500 by 15%. You can either claim the amount or a portion of CTC, but you cannot completely utilize it.
How to Get a Child Tax Credit?
For 2024, you can claim the CTC and additional child tax credit on your income tax return by filling out Form 1040 or 1040 SR by October 2024 if you have requested an extension to file the tax return. Form 1040 permits taxable income through several credits, including education credits, child tax credits, and many more. All you need to do is fill out Schedule 8812, which is generally used to evaluate the Child Tax Credit and Additional Child Tax Credit.
You can use the official tax software to seek guidance on the application questions asked while completing the application and also to fill out the form automatically. If you have more than 3 children, we advise you to read Schedule 8812 for a better understanding. Kindly note that if your earnings are below the threshold, you are entitled to the free-of-cost tax software using the IRS Free Filing program.
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All We Know
At present, the Child Tax Credit is a non-refundable tax credit accessible to taxpayers with dependent children. It provides dollar-for-dollar reductions on their tax bill. We would like to inform you that a few taxpayers might be eligible for a partial refund of the CTC using the Additional Child Tax Credit.
The eligibility requirement typically involves the child’s age and his/her relationship with the applicant. The income rule also implies that low-income holders can get financial relief than those earning handsomely. Once the modified adjusted gross income excels is the limit of the filling status, the CTC amount will automatically decrease, or the individual will be exempted.
