Shreya Vijay Chavan
The Child Care Tax Credit makes some sense.
Noam Chomsky
Child Tax Credit in the USA
The Child Tax Credit is a tax refund granted to American taxpayers with dependent children. To get the benefit of CTC, the child should be under the age of 17 at the end of the year.
The expansion of the Child Tax Credit will help thousands of children to get out of poverty. The Internal Revenue Service (IRS), is responsible for administrating the Child Tax Credit program. It has also implemented measures to ensure that eligible families are aware of the occurring changes and can easily seek support when needed.
Changes made in Child Tax Credit by USA.
The Tax Relief for American Families and Workers Act of 2024; passed the House in February with bipartisan support. Even when the bill got easily passed, it currently remains mired in the Senate. Some taxpayers have eyes on the progress of the bill because it had a provision that could have contributed to a refund for their 2023 taxes. While April 15 is the regular tax-filling deadline, tax experts are advising not to delay in tax-filling with the hope that tax legislation could pass in this unpredictable political environment.
The maximum refundable child tax credit amount is about $1,600 per dependent child. Reports say that it would increase to $1,800 for the ongoing filing season. In the tax years 2024 and 2025, the refundable amount of tax credit is expected to increase to $1,900 and $2,000 per dependent child.
Who is eligible to claim a Child Tax Credit in the USA?
To get the benefit of the Child Tax Credit, taxpayers and their children must meet certain eligibility criteria.
To qualify for eligibility criteria, one should fit in the following alternatives:-
Age:– The child must be under the age of 17 by the end of the year.
Relationship:- The taxpayer must be the child’s biological, adoptive, foster, or step-parent. Taxpayers must be providing more than half of children’s financial support. The children must also be dependent on the taxpayer’s tax returns.
Residence:- The child must have lived with the taxpayer for at least half of the year. As per the IRS, the child must be a U.S. citizen, U.S. national or U.S. resident-aligned. to be considered eligible for the Child Tax Credit.
Income Level:- Income level plays an important role in determining eligibility for the full credit amount. For couples who are filing annual tax returns jointly; the maximum income limit is $200,000. While for the others it starts at $100,000. Families can claim the credit when they are filing their annual tax returns.
Could it start in the year 2024?
The Tax Relief of American Families and Workers Act; is yet to be scheduled for a vote in the Senate. Reports are saying that some Republicans are against some of the provisions.
Even so, advocates are still holding hope that the bill could pass and taxpayers will be able to receive some relief.
National Parents Union and an advocacy group for parents have urged lawmakers at a rally conducted on April 10 to move the legislation forward soon.