Child Tax Credit 2024: The Case for Delay, Why You Should Wait to File Your Tax Return

The IRS received an impressive number of over 15 million returns. It is generally recommended to submit your tax return as early as possible if you anticipate a tax refund, in order to expedite the process of receiving your funds. 

However, if you have children and you’re claiming the child tax credit this year, it might be wise to take a moment before filing. 

The Senate is currently reviewing a potential expansion of the child tax credit. Below, we will provide an explanation of the current situation. 

As we delve into the intricacies of the child tax credit for the year 2024, it is essential to understand the key components, eligibility criteria, and potential changes that may impact taxpayers. The child tax credit, both the existing version and the proposed modifications awaiting approval in Congress, plays a crucial role in providing financial support to eligible families.

Eligibility Criteria for the 2024 Child Tax Credit

To qualify for the child tax credit in 2024, taxpayers and their families must meet the following requirements:

  • Modified Adjusted Gross Income (MAGI): Individuals with a MAGI of $200,000 or less, or $400,000 or less for joint filers, are eligible.
  • Child’s Age: The child must have been under the age of 17 on December 31, 2023.
  • Valid Social Security Number: The child being claimed for the credit must possess a valid Social Security number.
  • Relationship and Dependency: The child should be a legally recognized child, stepchild, foster child, sibling, half-brother or half-sister, or a descendant of one of these categories. The child must also be claimed as a dependent on the tax return.
  • Financial Support: The child must not have contributed more than half of their own financial support during the relevant tax year.
  • Residency: The child should have lived with the taxpayer for over half of the year.
  • Citizenship: The taxpayer must be a US citizen or resident alien.

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2024 Child Tax Credit Amounts

The IRS received an impressive number of over 15 million returns.

For the tax year 2024, the maximum tax credit available per child is $2,000, applicable to each child under 17 on December 31, 2023. Notably, only a portion of this credit is refundable, up to $1,600 per child.

Changes and Proposed Amendments

While the child tax credit underwent significant expansion for tax year 2021, with higher amounts and extended age limits, the 2024 version has reverted to a maximum credit of $2,000 per child under 17. Proposed changes for 2023, 2024, and 2025 are currently under consideration by Congress.

If approved, the new rules would maintain partial refundability, increasing the maximum refundable amount per child from $1,600 in 2023 to $1,800 in 2024 and $1,900 in 2025, with adjustments for inflation in the latter years. The remainder of the $2,000 would be nonrefundable, applicable only against owed taxes.

Filing Considerations and Future Updates

As taxpayers navigate the child tax credit landscape, it’s important to stay informed about potential changes. Though the proposed modifications have cleared the House, approval in the Senate remains uncertain.

The Internal Revenue Service (IRS) recommends filing tax returns based on current laws, as any adjustments due to legislative changes may be addressed automatically or through amended returns.

For more information and to determine eligibility, taxpayers can visit the IRS website and consult with tax advisors for personalized guidance.

Additional Tax Credits and Considerations

Beyond the child tax credit, families may explore other federal income tax breaks, including adoption credits, education credits, and the earned income tax credit. 

Various states also offer state child tax credits, with requirements and benefits varying by location.

Stay informed, file accurately, and explore available credits to make the most of your tax benefits in 2024.

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