Being a parent is a tough job; you’re constantly thinking about how to protect and provide for another human being while worrying about yourself. If no one has told you lately, you should know you’re superhuman. In this blog, we’ll be talking about how to enhance your parental superpower with just one tax credit.
It might seem weird that taxes even have anything to do with helping you reach your full potential as a parent, but you know what? As it’s a priority for you to pay taxes, it’s also important to take advantage of tax credits and deductions.
If you haven’t gotten the hint by now, then it’s time to spill the tea!
If you’re a parent looking for a great way to reduce your tax bill in 2024, then the Child Tax Credit is just what you need!
What Is The Child Tax Credit?
The Child Tax Credit is a federal tax credit that provides financial support for taxpayers with children. In essence, it reduces your taxes on a dollar-for-dollar basis; you might also be eligible for a partial refund through what is called the “Additional Child Tax Credit” if you qualify but can’t take full advantage of it because you don’t owe taxes or owe less than your credit amount.
Child Tax Credit Eligibility
If you have children under the age of 17, then you’re eligible to claim up to $2,000 per eligible dependent with a potential refund of up to $1600.Age isn’t the only qualifying criterion for claiming the Child Tax Credit; it’s also about your relationship with the person claiming the dependent. Eligible children include your daughters, sons, step-siblings, half-siblings, siblings, or dependents, including grandchildren, nieces or nephews.
In addition, the child must have a valid Social Security number and live with the taxpayer for a minimum of six months.
You must also meet specific income rules because the tax credit phases out high-income earners. Once your modified adjusted gross income surpasses the limit for your filing status, the tax credit amount you get could also be smaller or render you ineligible.
You must also have contributed a minimum of 50% of the child support in 2023, and your children or dependents must be residents or citizens with a valid Social Security number.
What’s The Difference Between The 2023-2024 Child Tax Credit?
The Child Tax Credit for 2023 is worth $2,000 per qualifying dependent if your modified adjusted gross income begins at $400,000 or below (for couples filing jointly) or $200,000 or below for other filers. If your MAGI (Modified Adjusted Gross Income) is more than the limit, our credit gets reduced by $50 for each $1,000 your income exceeds the limit.
Since the lawmakers’ efforts to expand the 2024 Child Tax Credit in time for the 2024 filing season have proven abortive, the tax break remains unchanged for the April 15 tax deadline. For the 2024 tax year, the Child Tax Credit will be the same maximum amount of $2,000 per qualifying child. However, there’s a potentially refundable $1700 through the additional shield tax credit.
Monthly Child Tax Credit 2024
As of the year 2024, the Child Tax Credit will be claimed based on individual parents, requirements, and eligibility instead of the monthly Child Tax Credit.
Child Tax Credit Payment Schedule 2024
Because the Child Tax Credit for July 2024 is not scheduled, there will be no individual payouts. Eligible taxpayers will have to claim the credit on the tax return filed in 2025
While this tax credit is an amazing opportunity to get some tax refund, there are also many other legal ways to get bigger tax refunds as a parent. Want to discover more tax-saving solutions? Book a free consultation with the Tax Goddess Team today!
