What Is The Child Tax Credit For 2024

Understanding The Child Tax Credit For 2024

The Child Tax Credit is a valuable tool that assists families with qualifying children in obtaining a tax break. Even if you do not typically file a tax return, you may still be eligible to claim this credit.

Who Qualifies for the Child Tax Credit

To qualify for the Child Tax Credit for the 2024 tax year, your dependent must meet certain criteria:

• Be under the age of 17 at the end of the year
• Be your son, daughter, stepchild, eligible foster child, sibling, or a descendant of one of these
• Provide no more than half of their own financial support
• Have lived with you for more than half of the year
• Be claimed as your dependent on your tax return
• Not file a joint return with their spouse, unless it is solely for claiming a refund
• Be a U.S. citizen, U.S. national, or U.S. resident alien

If you meet all eligibility factors and your annual income is not more than $200,000 ($400,000 for joint filers), you qualify for the full amount of the 2024 Child Tax Credit for each qualifying child.

How to Claim the Child Tax Credit

To claim the Child Tax Credit, you need to include your children and other dependents on Form 1040, U.S. Individual Income Tax Return, and attach a completed Schedule 8812, Credits for Qualifying Children and Other Dependents.

If your claim is audited or denied, there are specific steps to follow, including what to do in case of an audit or denial, and how to claim the credit if it was denied in the past.

Other Tax Credits for Families

Aside from the Child Tax Credit, families who qualify may also be eligible for additional tax credits such as the Child and Dependent Care Credit, Earned Income Tax Credit, Adoption Credit and Adoption Assistance Programs, and Education credits. There is also the Credit for Other Dependents available for children or dependents who do not meet the criteria for the Child Tax Credit.

Enhancements to the Child Tax Credit

The American Rescue Plan made significant expansions to the Child Tax Credit, providing crucial support to families raising children. The full amount of the credit was distributed to families in need, with monthly payments for the first time. This expansion had a profound impact on reducing child poverty, with over 60 million children benefiting from the increased CTC.

President Biden aims to restore the American Rescue Plan’s critical expansion of the Child Tax Credit to continue uplifting American families and children.

Refundable Tax Credits

A refundable tax credit allows you to receive a refund even if you do not owe any tax. It is essential to file taxes to ensure you do not miss out on refundable credits that you may be eligible for.

Earned Income Tax Credit (EITC)

The Earned Income Tax Credit is available to individuals with low to moderate incomes. To qualify, you must have earned income below a specific threshold and meet certain criteria based on your filing status and the number of children you have.

Child Tax Credit (partially refundable)

The Child Tax Credit for 2024 provides up to $2,000 per qualifying child. A portion of this credit, known as the Additional Child Tax Credit (ACTC), is refundable, allowing you to receive up to $1,600 per child as a refund.

American Opportunity Tax Credit (partially refundable)

If you paid qualified education expenses for an eligible college student, you may be eligible for the American Opportunity Tax Credit. This credit can provide up to $2,500 per year, with a portion of it being refundable.

Premium Tax Credit

Individuals who purchase health insurance through the Health Insurance Marketplace may qualify for the Premium Tax Credit. This refundable credit is based on your income and the cost of your healthcare plan.

The Young Child Tax Credit (YCTC)

The Young Child Tax Credit offers up to $1,117 per eligible tax return for the tax year 2024. California families with earned income of $30,931 or less and a qualifying child under 6 years old may qualify for this credit. The YCTC may provide cash back or reduce any tax owed.

For tax year 2022 onwards, earned income is not required, and individuals may have a net loss of up to $33,497 while meeting CalEITC and YCTC requirements.

It is crucial to file your state tax return to claim the Young Child Tax Credit, using the FTB 3514 form for the 2024 tax year. The credit is also available for prior tax years, with specific eligibility criteria for each year.

By understanding the various tax credits available, families can maximize their tax benefits and financial support for raising children and meeting educational expenses.