Child Tax Credit 2024: Should You Wait to File Your Tax Return?

It is tax season, and many individuals are making ready to file their tax returns as quickly as potential to get any refund a refund. When you have kids and also you count on to assert the kid tax credit score this yr, it might be helpful to attend to file. It is because the Senate now’s engaged on an growth of the kid tax credit score. We’ll clarify what is going on on under. 

The kid tax credit score — each the present credit score and the one making its means by Congress — is partially refundable, that means that for part of the credit score you will get a refund even if you happen to do not owe any tax. The rest is nonrefundable, so you should utilize that a part of the tax credit score solely in opposition to taxes you owe. We’ll clarify the necessities that should be met to be eligible for the kid tax credit score in 2024. 

Discover out under if you happen to’re eligible for the kid tax credit score in 2024 and the way a lot cash you can get. For extra tax suggestions, listed below are this yr’s submitting deadlines and our picks for the greatest tax software program. Here is when you’ll be able to count on to obtain your baby tax credit score this yr.

Learn extra: File Early and Get As much as 20% Off Your 2023 Taxes With TurboTax

How a lot is the 2024 baby tax credit score?

The utmost tax credit score out there per child is $2,000 for every baby beneath 17 on Dec. 31, 2023. Solely a portion is refundable this yr, as much as $1,600 per baby.

For tax yr 2021, the expanded baby tax credit score was $3,600 for kids 5 and beneath, and $3,000 for kids ages six to 17. That is now not the case. The age requirement was additionally quickly prolonged to beneath 18 on Dec. 31, however that is additionally gone. 

Who’s eligible for the kid tax credit score?

To be eligible for the tax break this yr, you and your loved ones must meet these requirements:

• You may have a modified adjusted gross income, or MAGI, of $200,000 or much less, or $400,000 or much less if you happen to’re submitting collectively.
• The kid you are claiming the credit score for was beneath the age of 17on Dec. 31, 2023.
• They’ve a sound Social Safety quantity.
• They’re your legally acknowledged baby, stepchild, foster baby, sibling, half-brother or half-sister, or a descendant of one among these classes (like a grandchild or niece or nephew).
• They’ve contributed not more than half of their very own monetary assist within the related tax yr.
• They’ve lived with you for over half the yr.
• You’re claiming them as a dependent in your tax return.
• You’re a US citizen or resident alien.

Go to the IRS website for extra info.

In case your MAGI is greater than the revenue limits, the quantity of kid tax credit score you obtain will lower by $50 for each $1,000 above the restrict. For instance, a MAGI of $210,000 as a person would permit you to declare $1,500 for every eligible baby. 

The kid tax credit score is phased out fully at $240,000 for people and $480,000 for married {couples} submitting collectively.

Be aware: If you happen to search on-line for info on the kid tax credit score, it’s possible you’ll come throughout particulars on the 2021 expanded tax breaks, so double-check that you simply’re viewing the newest info.

Mark Steber, chief tax info officer at Jackson-Hewitt, says many authorities websites hold historic info dwell “for folks taking part in catch-up with their taxes.” 

Will Congress develop the kid tax credit score in 2024?

As a part of an enormous COVID-19 support package deal, Congress in 2021 quickly expanded the kid tax credit score, which helped drive child poverty to a record low. Congress did not lengthen the expanded credit score in 2022, and the credit score returned to its pre-pandemic fee. 

If authorized, the brand new guidelines across the $2,000 baby tax credit score can be extra modest and canopy three tax years: 2023, 2024 and 2025. Which means if it is authorized you can declare the expanded credit score this tax season once you file your 2023 tax returns. 

As proposed proper now, the brand new baby tax credit score would proceed to be partially refundable (so, for part of the credit score you can get a refund even if you happen to did not owe any tax) and the brand new guidelines would enhance the utmost refundable quantity per baby from $1,600 per baby to $1,800 in tax yr 2023, to $1,900 in tax yr 2024 and to $2,000 in tax yr 2025, with the 2024 and 2025 quantities adjusted for inflation. 

The rest of the $2,000 after the refundable quantity ($200 for tax yr 2023) can be nonrefundable, so you can use the tax credit score solely in opposition to taxes you owe — after your tax invoice hits $0, you will not get further cash. 

Ought to I wait to file my taxes?

Although the proposed adjustments have cleared the Home, it is up within the air whether or not the Senate will approve the invoice. Till the laws is definitely signed into legislation, it’s possible you’ll marvel if you happen to ought to maintain off on submitting your tax return. “Except you are actually, actually hurting for cash, I’d wait to see what occurs,” Duke Alexander Moore, founding father of tax service Duke Tax, instructed CNET. 

Those that obtain the kid tax credit score usually do not obtain their tax refunds as quickly as those that aren’t claiming the credit score, however as an alternative get their refunds mid-February or later. If you happen to do resolve to file early and the brand new baby tax credit score guidelines get authorized, the IRS might ship you the distinction this yr or you can declare it subsequent yr once you file, Moore mentioned.

On the flip facet, the IRS instructed CNET it recommends submitting as quickly as you’re prepared, whether or not contemplating pending laws or not. Lisa Greene-Lewis, a CPA and tax knowledgeable at Intuit, maker of TurboTax, agrees as a result of there are different credit out there for fogeys past the kid tax credit score they’ll reap the benefits of, reminiscent of the earned revenue tax credit score.

If the adjustments do turn out to be legislation, Greene-Lewis instructed CNET the present proposal means that the IRS may be capable of make changes on its finish with out requiring impacted tax filers to amend their tax returns.

At all times seek the advice of together with your tax advisor in your particular person tax wants.

How do I declare the kid tax credit score?

You may declare the kid tax credit score by getting into your eligible kids in your Form 1040 and attaching a accomplished Schedule 8812, Credits for Qualifying Children and Other Dependents. 

What if the credit score is greater than what I owe in taxes?

The kid tax credit score this yr is just not totally nonrefundable. That implies that in case your tax legal responsibility exceeds what you get from the credit score, you forfeit the distinction.

You should still be capable of declare the additional child tax credit, which refunds as much as $1,600 per baby. (To see if you happen to qualify for the extra baby tax credit score, fill out the worksheet for IRS Form 8812.)

If you happen to paid for childcare, you may additionally qualify for the child and dependent care credit. Relying in your circumstances, you’ll be able to declare 20% to 35% of your childcare bills.

The utmost you’ll be able to declare is $3,000 for one baby beneath 13 or a dependent with disabilities, or $6,000 for 2 or extra. 

You’re required to have earned revenue to qualify for this credit score and the care in your kids should not have been offered by a partner or member of the family.

Different federal revenue tax breaks out there to households embrace adoption credits, education credits and the earned income tax credit.

Is there a state baby tax credit score?

Greater than a dozen states — California, Colorado, Idaho, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oklahoma, Oregon, Utah and Vermont — have some type of tax credit score that advantages households, in response to the National Conference of State Legislatures. Many others are contemplating implementing the tax break.

Necessities and advantages fluctuate, so test with your state tax portal for particulars.