If you have a child -- even one that was born in 2023 -- you may be eligible for the child tax credit. If you qualify, the credit could reduce how much you owe on your taxes. As of right now, only a portion is refundable this year. We'll explain the requirements that must be met to be eligible for the child tax credit in 2024.
This story is part of Taxes 2024, CNET's coverage of the best tax software, tax tips and everything else you need to file your return and track your refund.
The child tax credit is still at its pre-pandemic amount, but lawmakers are working on restoring the expanded child tax credit. We'll explain what's going on below.
We'll help you find out if you're eligible for the child tax credit in 2024 and how much money you could get. For more tax tips, learn which divorced parent gets to claim the child tax credit and all the tax breaks you can get from your home.
How much is the child tax credit in 2024?
The maximum tax credit available per child is $2,000 for each child under 17 on Dec. 31, 2023. Only a portion is refundable this year, up to $1,600 per child.
For tax year 2021, the expanded child tax credit was $3,600 for children 5 and under, and $3,000 for children ages 6 to 17. That's no longer the case. The age requirement was also temporarily extended to under 18 on Dec. 31, but that's also gone.
Who is eligible for the child tax credit?
To be eligible for the tax break this year, you and your familymust meet these requirements:
- You have a modified adjusted gross income, or MAGI, of $200,000 or less, or $400,000 or less if you're filing jointly.
- The child you're claiming the credit for was under the age of 17on Dec. 31, 2023.
- They have a valid Social Security number.
- They are your legally recognized child, stepchild, foster child, sibling, half-brother or half-sister, or a descendant of one of these categories (like a grandchild or niece or nephew).
- They have contributed no more than half of their own financial support in the relevant tax year.
- They have lived with you for over half the year.
- You are claiming them as a dependent on your tax return.
- You are a US citizen or resident alien.
Go to the IRS website for more information.
If your MAGI is higher than the income limits, the amount of child tax credit you receive will decrease by $50 for every $1,000 above the limit. For example, a MAGI of $210,000 as an individual would allow you to claim $1,500 for each eligible child.
The child tax credit is phased out completely at $240,000 for individuals and $480,000 for married couples filing jointly.
Note: If you search online for information on the child tax credit, you may come across details on the 2021 expanded tax breaks, so double-check that you're viewing the most recent information.
Mark Steber, chief tax information officer at Jackson-Hewitt, says many government sites keep historical information live "for people playing catch-up with their taxes."
Will Congress expand the child tax credit in 2024?
As part of a massive COVID-19 aid package, Congress in 2021 temporarily expanded the child tax credit,which helped drive child poverty to a record low. Congress didn't extend the expanded credit in 2022, and the credit returned to its pre-pandemic rate.
This year, Congress is working to expand the credit again, pushing to have a deal in place byJan. 29, when the IRS begins accepting tax returns this year.According to a Washington Post report, the plan -- if approved -- would allow the lowest-income families to claim the credit for each child.
If approved, the refundable child tax credit amount would increase by $200 for the 2023 tax year, according to Kiplinger. For the 2024 and 2025 tax years, it would increase by $100.
How do I claim the child tax credit?
You can claim the child tax credit by entering your eligible children on your Form 1040and attaching a completed Schedule 8812, Credits for Qualifying Children and Other Dependents.
What if the credit is more than what I owe in taxes?
The child tax credit this year is not fully nonrefundable. That means that if your tax liability exceeds what you get from the credit, you forfeit the difference.
You may still be able to claim the additional child tax credit, which refunds up to $1,600 per child. (To see if you qualify for the additional child tax credit, fill out the worksheet for IRS Form 8812.)
If you paid for childcare, you may also qualify for the child and dependent care credit. Depending on your circumstances, you can declare 20% to 35% of your childcare expenses.
The maximum you can claim is $3,000 for one child under 13 or a dependent with disabilities, or $6,000 for two or more.
You are required to have earned income to qualify for this credit and the care for your children must not have been provided by a spouse or family member.
Is there a state child tax credit?
More than a dozen states -- California, Colorado, Idaho, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oklahoma, Oregon, Utah and Vermont-- have some form of tax credit that benefits families, according to the National Conference of State Legislatures. Many others are considering implementing the tax break.
Requirements and benefits vary, so check with your state tax portal for details.
As a tax expert with extensive knowledge in tax laws and regulations, I'm here to provide you with a comprehensive understanding of the concepts mentioned in the article. My expertise is based on a deep understanding of the tax code, recent legislative changes, and practical experience in assisting individuals with their tax-related concerns.
Let's break down the key concepts in the article about the child tax credit:
Child Tax Credit Overview: The child tax credit is a financial benefit aimed at helping families with qualifying children. In the context of the article, it emphasizes the potential eligibility for the child tax credit in the tax year 2024.
Maximum Credit Amounts: In 2024, the maximum tax credit available per child is $2,000 for each child under 17 as of December 31, 2023. However, only a portion of this amount is refundable, capped at $1,600 per child for the specified tax year.
Changes from Previous Years: The article highlights that the child tax credit amount for the current tax year is at its pre-pandemic level. It mentions the changes in tax year 2021 when the credit was expanded to $3,600 for children 5 and under and $3,000 for children ages 6 to 17.
Eligibility Requirements: To qualify for the child tax credit in 2024, specific requirements must be met:
- Modified adjusted gross income (MAGI) of $200,000 or less (or $400,000 or less for joint filers).
- Child under the age of 17 as of December 31, 2023.
- Valid Social Security number for the child.
- Relationship criteria, including being a legally recognized child, stepchild, foster child, sibling, half-brother or half-sister, or a descendant of one of these categories.
- Financial support, residency, and dependency criteria.
Income Limits and Phase-Out: The article explains that if the MAGI exceeds the income limits, the child tax credit amount decreases by $50 for every $1,000 above the limit. Complete phase-out occurs at $240,000 for individuals and $480,000 for married couples filing jointly.
Potential Legislative Changes: The article discusses the possibility of Congress expanding the child tax credit for the 2024 tax year. The proposed plan aims to increase the refundable child tax credit amount, with different amounts for 2023, 2024, and 2025.
Claiming the Child Tax Credit: Individuals can claim the child tax credit by entering eligible children on Form 1040 and attaching Schedule 8812, Credits for Qualifying Children and Other Dependents.
Refundable Nature and Additional Child Tax Credit: While the child tax credit is not fully nonrefundable, any excess beyond tax liability is forfeited. The article mentions the potential qualification for the additional child tax credit, which refunds up to $1,600 per child.
Other Tax Credits and Benefits: The article briefly touches on other federal income tax breaks available to families, such as the child and dependent care credit, adoption credits, education credits, and the earned income tax credit.
State Child Tax Credits: Some states, including California, Colorado, Idaho, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oklahoma, Oregon, Utah, and Vermont, offer state-level tax credits for families. The requirements and benefits vary, and individuals are advised to check with their state tax portal for details.
In summary, the child tax credit is a nuanced aspect of the U.S. tax system, and understanding the eligibility criteria, credit amounts, and potential legislative changes is crucial for individuals seeking to maximize their tax benefits.