With the approaching tax season, many parents are eager to ascertain the amount they will receive through the Child Tax Credit (CTC).
Conversely, others are simply interested in determining their eligibility for the benefit or the possibility of a refund based on their income.
For numerous American families, the CTC plays a crucial role in their financial planning, whether it be through the tax deductions it offers or the refunds attainable via the Additional Child Tax Credit (ACTC).
Families facing low income or those who, for various reasons, had no income in the tax year 2023, may experience financial strain due to their inability to access the CTC.
However, a recent legislative amendment has provided a welcome opportunity for relief.
Commencing with the 2023 tax year, to be filed in 2024, families with no income are now eligible to apply for the CTC and receive a refund of up to $1,600 for each qualifying child.
Eligibility for Child Tax Credit
To be eligible for the Child Tax Credit (CTC), a child must meet the following criteria:
- Be under 17 years of age as of the year’s end.
- Satisfy the relationship criteria outlined by the Internal Revenue Service (IRS).
- Not contribute more than half of their own financial support annually.
- Reside with the applicant for more than half of the year.
- Hold status as a US citizen, US national, or an alien US resident.
- The applicant should neither file a joint return with their spouse nor complete it solely to claim a refund of withheld income tax or estimated tax paid.
Claiming Child Tax Credit 2024: Key Steps
The maximum Child Tax Credit (CTC) is available for individuals with an income not exceeding $400,000 in the case of married filers submitting a joint return and $200,000 for other filers.
For taxpayers whose modified adjusted gross income surpasses these thresholds, the CTC will diminish by $50 for each $1,000 that their income exceeds the specified limit.
While the maximum credit per qualifying child is $2,000, families with lower income or no income can apply for the Additional Child Tax Credit (ACTC), potentially receiving up to $1,600 in rebates for each qualifying child.
To ascertain eligibility for the ACTC, individuals must complete Form 8812.