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.
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Regarding the concepts mentioned in the article you provided, let's discuss each one in detail:
Child Tax Credit in 2024
The child tax credit is a tax benefit that can reduce the amount of taxes owed by eligible individuals who have children. In 2024, the maximum tax credit available per child is $2,000 for each child under 17 on December 31, 2023 It's important to note that only a portion of the credit is refundable this year, up to $1,600 per child.
Eligibility for the Child Tax Credit
To be eligible for the child tax credit in 2024, you and your family must meet certain requirements. These requirements include:
- Having a modified adjusted gross income (MAGI) of $200,000 or less, or $400,000 or less if filing jointly.
- The child you're claiming the credit for must have been under the age of 17 on December 31, 2023.
- The child must have a valid Social Security number.
- The child must be 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).
- The child must have contributed no more than half of their own financial support in the relevant tax year.
- The child must have lived with you for over half the year.
- You must be claiming the child as a dependent on your tax return.
- You must be a US citizen or resident alien.
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. The credit is phased out completely at $240,000 for individuals and $480,000 for married couples filing jointly.
Potential Expansion of the Child Tax Credit in 2024
Congress is currently working to expand the child tax credit again in 2024. If approved, the plan would allow the lowest-income families to claim the credit for each child. The refundable child tax credit amount would increase by $200 for the 2023 tax year and by $100 for the 2024 and 2025 tax years.
Claiming the Child Tax Credit
To claim the child tax credit, you need to enter your eligible children on your Form 1040 and attach a completed Schedule 8812, Credits for Qualifying Children and Other Dependents.
Child Tax Credit and Tax Liability
If the child tax credit is more than what you owe in taxes, the credit is not fully nonrefundable. This means that if your tax liability exceeds the credit amount, you forfeit the difference. However, you may still be able to claim the additional child tax credit, which refunds up to $1,600 per child. Additionally, if you paid for childcare, you may qualify for the child and dependent care credit.
State Child Tax Credit
Several states, including 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. The requirements and benefits vary, so it's recommended to check with your state tax portal for specific details.
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