The Child Tax Credit (CTC) has been a crucial form of support for many families in the United States, especially following the reforms implemented over the past few years. As we near the end of 2024, many are wondering what remaining payments are available under this program and what to expect regarding eligibility and amounts.
The Child Tax Credit is a tax benefit that allows families to receive up to $2,000 per child under 17 when filing their tax returns. In 2021, due to the pandemic, this credit was temporarily enhanced, allowing families to receive up to $3,600 annually for each child under 6 years old and up to $3,000 for children between 6 and 17 years old. However, those enhancements have since expired, and in 2024, families have returned to the pre-expansion conditions, with a maximum of $2,000 per child.
What remaining Child Tax Credit payments can be expected for the rest of 2024?
As we approach the end of 2024, there will be no more advance payments like those offered in 2021. Instead, families who qualify for the Child Tax Credit will need to claim the full amount when they file their tax returns in 2025. If you have earned enough income to be eligible, you will receive the money either as a tax deduction or as part of your tax refund.
Although the full credit amount is up to $2,000 per child, not every family will receive the maximum amount. The exact figure depends on household income. Families with incomes below $200,000 (or $400,000 for couples filing jointly) are eligible for the full credit. However, once a household’s income surpasses those thresholds, the credit begins to phase out gradually.
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It’s also important to remember that not all of the credit is refundable. Up to $1,400 per child can be refunded to families even if their tax liability is lower than the amount of the credit. This feature, known as the Additional Child Tax Credit (ACTC), ensures that families with lower incomes still benefit.
However, if you owe no taxes or very little, you may not receive the full $2,000, but only the refundable portion. In contrast, families with higher tax liabilities can offset more of their taxes with the non-refundable portion.
Changes and other related assistance
Some states have implemented additional child tax credits to complement the federal Child Tax Credit. States like California and New York have enacted additional credits, ranging from $250 to $1,000, to provide further financial relief to families with children.
These state-level credits can be claimed when you file your state tax returns, but the specifics, including the amount and eligibility requirements, vary by state. It’s a good idea to check with your local tax authorities or visit your state’s tax website to see if you qualify for any extra credits in addition to the federal program.
In recent years, many families have grown accustomed to receiving advance payments under the enhanced CTC rules, which spread the payments out over several months. These payments helped cover ongoing expenses throughout the year rather than waiting until tax season to receive the entire benefit. Since those advance payments were temporary, families now need to adjust their expectations and prepare for receiving the full credit when filing taxes in 2025.
For families who are accustomed to those monthly payments, the shift back to a lump sum might require different financial planning. To avoid surprises, consider reviewing your tax situation now to understand how the change might impact your refund or tax liability. If you’re unsure how this shift will affect you, seeking advice from a tax professional can help you plan accordingly.
Maximizing Tax Benefits for Families with Children
In addition to the federal Child Tax Credit, there are other forms of assistance for families with children. Some families may qualify for other tax benefits, such as the Earned Income Tax Credit (EITC) or the Child and Dependent Care Credit, which can help offset childcare expenses. These credits can be claimed alongside the Child Tax Credit, potentially increasing the total tax relief available to eligible families. As with the Child Tax Credit, the amount you can claim from these programs depends on your income and family situation.
It’s important to stay informed about both federal and state tax benefits as tax laws can change, sometimes with little notice. Keeping an eye on potential changes to the Child Tax Credit, especially with upcoming elections and budget negotiations, can help you make the most of any available benefits.
