Millions of Americans claim the Child Tax Credit (CTC) each year, but you don’t want to lose it or have your return delayed because of a minor error at tax time. The Child Tax Credit can provide you with up to $2,000 for each child under the age of 17 on your 2024 returns. This benefit, however, is reduced if your adjusted gross income surpasses $200,000 if you are single or $400,000 if you are filing jointly with a spouse. Moreover, many people are unaware of the Additional Child Tax Credit (ACTC), a refundable component that can total up to $1,700. The best thing is that the ACTC, which frequently helps those with lower incomes, may be available to you even if you do not owe taxes.
This is the reason why thousands of people have been left without the child tax creditÂ
The National Taxpayer Advocate, Erin Collins, said that many low-income families lose thousands of dollars because they are unsure of how to apply for this benefit. Think about the amount of money you would have gotten. It’s not just you who needs this credit; over 18 million people applied for it in 2022. If you wish to claim the credit, you should be aware that the IRS is unable to provide ACTC reimbursements before the middle of February. Nonetheless, eligible beneficiaries should remember that if they filed before February 22, they can check their refund status by checking the Where’s My Refund? tool from the IRS.
It is important to highlight that interested applicants must ensure that their child meets IRS standards to apply for the credit. Note that the prerequisites may be a little unclear. In addition to living with you for more than half the year and not filing a tax return on their own, the child must be under 17 after the tax year. Employing a tax preparer or using tax software can help you prevent eligibility problems because these programs typically determine your child’s eligibility automatically. Making the mistake of filing your return before obtaining your child’s SSN is another frequent error.Â
Americans should be aware that it may take anything from one to six weeks for the number to come if you have a newborn. If you file without this number, you risk losing your credit. Asking for an extension will give you additional time to file if you haven’t received the number yet. However, keep in mind that taxes must be paid on the initial due date. It’s important to utilize quality tax software or get professional assistance if you’re unsure how to claim the child tax credit (CTC) and to avoid losing thousands of dollars due to a minor error.Â
How will the child tax credit change in this new tax season?Â
Asking for an extension will give you additional time to file if you haven’t received the number yet. However, keep in mind that taxes must be paid on the initial due date. Don’t lose thousands of dollars because of a minor error. It’s important to utilize quality tax software or get professional assistance if you’re unsure how to claim the child tax credit. People who are still submitting their taxes should be aware of the requirements to be eligible for the full CTC. If a married couple files their taxes together, their modified adjusted gross income must be $400,000 to qualify for the maximum tax credit amount. Single taxpayers must, however, have a modified adjusted gross income of $200,000 or less.Â
Credits that have been lowered by $50 for each $1,000 over the income barrier will be given to citizens who earn more than the current earning threshold in modified adjusted gross income. When submitting your tax returns, you must compute your modified adjusted gross income (MAGI). Determining your MAGI makes it much simpler to figure out how much ACTC you will get. The Additional Child Tax Credit (ACTC) may also be available to taxpayers who are tax-exempt or who owe less in taxes than the credit amount. Your earned income over $2,500 is multiplied by 15% by the IRS to determine your ACTC amount. However, for all eligible defendants, the maximum ACTC refund for the 2024 tax year is $1,700.
