If a new tax law is approved, families in New York may be eligible to receive up to $2,000 per child from the Internal Revenue Service.
In recent weeks, the House of Representatives approved the Tax Relief for American Families and Workers Act.
This legislation brings good news for eligible taxpayers, as it includes an expansion of the Child Tax Credit.
As a result, families can look forward to claiming hundreds of additional dollars in refunds in the years ahead.
The bill is still pending Senate approval.
Senator Kirsten Gillibrand (D-New York) stated that the agreement would offer assistance to New York families by simplifying the process for low-income families to qualify for the Child Tax Credit, adjusting the credit for inflation, and aiding in lifting an estimated 400,000 children out of poverty.
Updated Child Tax Credit: What You Need to Know
Here is a detailed overview of the enhancements included in the expanded tax deal:
- Currently, the maximum refundable child tax credit stands at $1,600 per child for the tax year 2023. However, under the new provision, this maximum refundable amount per child will increase to $1,800 in tax year 2023, $1,900 in tax year 2024, and $2,000 in tax year 2025.
- The expanded tax credit is designed to offer a greater benefit to low-income families with more than two children. While the original Child Tax Credit calculated by multiplying a family’s income exceeding $2,500 by 15%, the enhanced credit will multiply this income by 15% and additionally by the number of children in the family.
- This year and the following year, adjustments will be made to the Child Tax Credit to account for inflation.
- Previously, the original credit necessitated a parent to earn at least $2,500 in annual income to be eligible. However, the new credit allows taxpayers to utilize their income from either the current or prior year in calculations, ensuring that families experiencing a sudden drop in income can still qualify.