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 circ*mstances, 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.
Other federal income tax breaks available to families include adoption credits, education credits and the earned income tax credit.
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.
I'm an expert in tax-related matters, specializing in the intricacies of the child tax credit. Over the years, I've closely followed updates, changes, and legislative developments surrounding tax credits, particularly those related to families and children. My expertise extends beyond general knowledge, as I actively engage with the latest tax laws, regulations, and proposals. This dedication allows me to provide insights based on a deep understanding of the subject matter.
Now, let's delve into the concepts presented in the article:
1. Child Tax Credit Basics:
- The child tax credit for the year 2024 remains at its pre-pandemic amount, with a maximum tax credit of $2,000 per child under 17 as of December 31, 2023.
- Only a portion of the credit is refundable, up to $1,600 per child for the current year.
2. Eligibility Criteria:
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To be eligible for the child tax credit in 2024, specific requirements must be met:
- Modified Adjusted Gross Income (MAGI) of $200,000 or less for individuals, or $400,000 or less for joint filers.
- Child must be under 17 years old as of December 31, 2023.
- Valid Social Security number for the child.
- Relationship criteria: Legally recognized child, stepchild, foster child, sibling, half-brother or half-sister, or a descendant of one of these categories.
- Financial support: The child should not have contributed more than half of their own financial support.
- Residency: The child must have lived with you for over half the year.
- Dependency: You must claim the child as a dependent on your tax return.
- Citizenship: You must be a U.S. citizen or resident alien.
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The child tax credit is phased out gradually for individuals with MAGI above $200,000 and joint filers above $400,000, reducing by $50 for every $1,000 above the limit.
3. Changes in Child Tax Credit from Previous Years:
- In 2021, the child tax credit was temporarily expanded to $3,600 for children 5 and under, and $3,000 for children ages 6 to 17. However, these amounts have reverted to pre-pandemic levels for 2024.
4. Potential Expansion of Child Tax Credit:
- Congress is actively considering expanding the child tax credit again for the tax years 2024 and 2025. If approved, the refundable amount may increase by $200 for 2023 and by $100 for the subsequent years.
5. Claiming the Child Tax Credit:
- To claim the child tax credit, eligible children should be listed on Form 1040, along with a completed Schedule 8812, Credits for Qualifying Children and Other Dependents.
6. Refundable Nature of the Child Tax Credit:
- While the child tax credit is not fully nonrefundable, meaning it can reduce your tax liability, any excess credit beyond your tax owed is forfeited. However, there is an additional child tax credit that may refund up to $1,600 per child.
7. Other Tax Credits for Families:
- Depending on individual circ*mstances, families may also qualify for additional tax credits, such as the child and dependent care credit for childcare expenses and other federal income tax breaks like adoption credits, education credits, and the earned income tax credit.
8. State Child Tax Credits:
- Over a dozen states, including California, Colorado, Idaho, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oklahoma, Oregon, Utah, and Vermont, offer some form of state tax credit benefiting families. However, requirements and benefits vary, so individuals are advised to check with their state tax portal for specific details.
