The child tax credit is a $2,000 benefit available to those with dependent children under 17. For 2024, $1,700 of the credit will be potentially refundable.
Updated Aug 2, 2024 · 4 min read Written by Sabrina Parys Assistant Assigning Editor Sabrina Parys
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Editor's Note: On Aug. 1, the Tax Relief for American Families and Workers Act of 2024, a nonpartisan bill that has been in and out of the news since January, failed to pass the Senate. Had the bill been successful, it would have made several changes to the child tax credit to help low-income families.
The child tax credit is a nonrefundable tax credit available to taxpayers with dependent children under the age of 17. The credit can reduce your tax bill on a dollar-for-dollar basis. Some taxpayers may also be eligible for a partial refund of the credit through what's called the “additional child tax credit."
To qualify, taxpayers and their children must meet certain eligibility criteria, which take into account the child's age and relationship to the person claiming them.
Taxpayers must also meet certain income rules because the credit phases out for high earners. Once your modified adjusted gross income (MAGI) exceeds the limit for your filing status, the credit amount you get may be smaller, or you may be deemed ineligible [0]
Internal Revenue Service . Child Tax Credit. Accessed Mar 14, 2023.Simple tax filing with a $50 flat fee for every scenario
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For 2024 (taxes filed in 2025), the child tax credit will be worth $2,000 per qualifying dependent child if your MAGI is $400,000 or below (married filing jointly) or $200,000 or below (all other filers).
If your MAGI exceeds the above limits, the credit is reduced by $50 for each $1,000 of income above the threshold until it phases out completely.
The refundable portion, also known as the additional child tax credit , will be worth up to $1,700 — up from $1,600 in 2023 [0]
Internal Revenue Service . Rev. Proc. 2023-34.The Tax Relief for American Families and Workers Act of 2024, a piece of nonpartisan legislation that would have modified the CTC to benefit lower-income families, failed to pass the Senate during an Aug. 1 vote. Had the bill passed, it would have made several changes to the credit, including:
Raising the refundable amount to $1,900 and $2,000 in tax years 2024 and 2025 and adjusting the base credit amount for inflation.
Allowing parents and caretakers to factor in how many children they have when determining the total credit amount they are eligible for.
Letting filers use their earned income from either the current year or the prior year to meet CTC eligibility requirements. This is especially significant for many lower-income families who might not otherwise qualify because they earned too little in a given year.
Taxpayers can claim the child tax credit when they file their annual tax returns. Generally, there are seven “tests” you and your qualifying child need to pass: age, relationship, dependent status, residency, financial support, citizenship and income.
Age: Your child must have been under the age of 17 at the end of the tax year.Relationship: The child you’re claiming must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister or a descendant of any of those people (e.g., a grandchild, niece or nephew).
Dependent status: You must be able to properly claim the child as a dependent . The child also cannot file a joint tax return , unless they file it to claim a refund of withheld income taxes or estimated taxes paid.
Residency: The child you’re claiming must have lived with you for at least half the year (there are some exceptions to this rule).
Financial support: You must have provided at least half of the child’s support during the last year. In other words, if your qualified child financially supported themselves for more than six months, they’re likely considered not qualified.
Citizenship: Per the IRS, your child must be a "U.S. citizen, U.S. national or U.S. resident alien," and must hold a valid Social Security number.
Income: Parents or caregivers claiming the credit also typically can’t exceed certain income requirements. Depending on how much your income exceeds that threshold, the credit gets incrementally reduced until it is eliminated.
Taxpayers can claim the 2024 child tax credit on the tax return they will file in 2025.
If you still need to file your 2023 tax return that was due April 15, 2024, or is due Oct. 15, 2024, with a tax extension , you can claim the child tax credit and the additional child tax credit on Form 1040 or 1040-SR.
You’ll also need to fill out Schedule 8812 (“Credits for Qualifying Children and Other Dependents”), which is submitted with your 1040. This schedule will help you figure out your credit amount and how much of the partial refund you may be able to claim if applicable.
Most quality tax software guides you through claiming the child tax credit with a series of interview questions, simplifying the process and even auto-filling the forms on your behalf. If your income falls below a certain threshold, you might also be able to get free tax software through IRS Free File .
If you qualify for the CTC but can't take full advantage because you don't owe taxes or owe less than your credit amount, you may be able to get a partial refund by claiming the additional child tax credit. To claim the ACTC, all of the above income and dependent criteria must be met, but there are also a few more rules:
📋 Additional child tax credit rulesYou must either have an earned income of at least $2,500 or have three or more qualifying dependents [0]
. Earned income typically means money from jobs or self-employment. It does not include money from passive sources such as dividends, pensions, welfare or unemployment.
You or your partner (if married filing jointly) cannot exclude foreign-earned income from your taxes by filing Form 2555 or Form 2555-EZ [0]
Internal Revenue Service . What You Need to Know about CTC, ACTC and ODC. Accessed Aug 16, 2023.The IRS figures your additional child tax credit amount by multiplying your earned income above $2,500 by 15%. You can claim that number or however much of the CTC credit you were entitled to but couldn’t fully use, whichever number is less. But keep in mind that the maximum refund for the 2024 tax year is capped at $1,700 per qualifying dependent. If you have three or more dependent children, the math can be more complex. See Schedule 8812 for more details.
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By law, the IRS can't release a refund for a return claiming the additional child tax credit until mid-February. If you file by paper, the wait times generally increase. The agency's " Where's My Refund " tool can also help you get of sense of what's going on with your funds.
An error on your tax form can delay your refund or the child tax credit portion of your refund. In some cases, the IRS could also deny the entire credit.
🚫 If the IRS denies your CTC claim:
You must pay back any CTC amount you’ve been paid in error, plus interest.You might need to file Form 8862, "Information To Claim Certain Credits After Disallowance," before you can claim the CTC again.
If the IRS determines that your claim for the credit is erroneous, you may be on the hook for a penalty of up to 20% of the credit amount claimed.
In addition to the federal child tax credit, a few states, including California, Colorado and New York, also offer their own state-level CTCs that you may be able to claim when filing your state return. Visit your state's department of taxation website for more details [0]
Tax Credits for Workers and Their Families . State Tax Credits. Accessed Jul 14, 2023.If your child or a relative you care for doesn't quite meet the criteria for the CTC but you are able to claim them as a dependent , you may be eligible for a $500 nonrefundable credit called the "credit for other dependents." The IRS has a tool that can help you to determine if your dependent qualifies [0]
Although similar sounding, the child tax credit and the child and dependent care credit are not the same thing. The child tax credit is a tax incentive for people with children, while the child and dependent care credit is another tax credit for working parents or caretakers designed to help offset expenses such as day camp or after-school care. Both credits have different rules and qualifications.
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Sabrina Parys is a content management specialist on the taxes and investing team at NerdWallet, where she manages and writes content on personal income taxes. Her work has appeared in The Associated Press, The Washington Post and Yahoo Finance. See full bio.
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