This year, the Child Tax Credit (CTC) features higher credit limits, full repayability and broader eligibility compared to previous years, so we’re here to take a look at what those changes are. The Child Tax Credit is issued by the Internal Revenue Service (IRS).
This new payment structure for the 2024 CTC differs from that of the previous year, focusing on monthly distributions that begin in July and culminate with a final payment in October. This approach offers more consistent financial support to eligible families throughout the year.
The next Child Tax Credit (CTC) payment for 2024 is expected to be credited by October 30, 2024. The CTC payments will be refunded or deposited directly into the beneficiaries’ bank accounts.
Child Tax Credit (CTC) Amounts in 2024
The maximum amount of the credit for 2024 is $2,000 per qualifying child, of which up to $1,700 is refundable.
This means that you can receive this part of the credit even if you don’t owe any federal income tax.
Currently, there are ongoing discussions about the possibility of increasing the credit amount and reintroducing monthly payments.
CTC eligibility: Who can receive these types of payments?
To qualify for the Child Tax Credit, you must have a qualifying child under the age of 17. The child must be your own child, a stepchild, or an adopted child placed with you by a court or an authorized agency. In addition, the child cannot have provided more than half of his own financial support during the tax year.
To qualify for the refundable portion of the credit, taxpayers must earn at least $2,500. Taxpayers can use their income earned from the current year or the previous year to meet this requirement.
To claim the Child Tax Credit for 2024, you will need to correctly file your tax return in 2025. Unlike previous years (here’s the change you should be aware of) there will be no individual payment for the CTC; instead, the credit will be claimed based on individual payment details, eligibility and specific requirements.
To claim the Child Tax Credit, you must meet all seven qualifying tests, which include:
- Age: The child must be under 17 years old.
- Kinship: The child must be your own child, stepchild or adopted child.
- Child support: The child must have provided no more than half of his or her own financial support.
- Dependent Status: The child must qualify as your dependent on your tax return.
- Citizenship: The child must be a U.S. citizen, U.S. national, or legal resident.
- Duration of Residence: The child must have lived with you for more than half of the year.
- Family Income: You must meet the established income requirements.
These tests ensure that only those who really meet the established criteria can benefit from the credit, offering fair and necessary support to families in need. Stay informed and make sure you meet all the requirements to make the most of the Child Tax Credit in 2024.