The Child Tax Credit (CTC) remains a vital financial resource for families with dependent children.
However, with talks of expansion in the Tax Relief for American Families and Workers Act of 2024, confusion might cloud tax planning.
Understanding Eligibility
The IRS advises filing taxes on time regardless of potential changes. Here’s a breakdown of current CTC eligibility (tax year 2024, filed in 2025) to help you navigate the process:
The CTC is a blend of refundable and non-refundable portions, reducing tax bills and offering partial refunds through the Additional Child Tax Credit (ACTC).
Who Qualifies?
- Age: Qualifying children must be under 17 at the end of 2023.
- Relationship: The child can be biological, adopted, stepchild, foster child, grandchild, or niece/nephew living with you.
- Dependency: You must claim the child as a dependent and they must have resided with you for at least half of 2023 (exceptions apply).
- Financial Support: You must have provided at least half of the child’s financial support in 2023.
- Citizenship: The child must be a U.S. citizen, national, or resident alien with a valid Social Security number.
- Income: Income thresholds determine eligibility; the credit phases out for high earners. For 2023 taxes (filed in 2024), the credit is $2,000 per child for those below a specific income limit.
The Additional Child Tax Credit (ACTC)
If your tax liability is less than the credit amount, the ACTC provides a partial refund. Its eligibility is based on earned income exceeding a designated threshold.
Staying Informed:
Tax credit eligibility evolves with legislation. Keep yourself updated to maximize potential benefits. As IRS Commissioner Danny Werfel advises, “Don’t wait to file your returns.”
This information reflects the current CTC and may change based on the Tax Relief for American Families and Workers Act of 2024. Consult the IRS website for the latest updates.
