Child tax credit increase latest status: Will you get money back this year?
A bill that would expand the child tax credit and potentially put more money into people’s pockets sailed through the U.S. House earlier this year, sparking hope that the plan would pass before 2024′s tax filing deadline.
But tax day has come and gone and expansion of the child tax credit still hasn’t materialized and it’s looking increasingly unlikely it ever will.
The expansion of the child tax credit was part of the Tax Relief for American Families and Workers Act introduced earlier this year. Currently, the child tax credit provides $2,000 for taxpayers but only $1,600 of that is refundable, meaning you get that money back even if you don’t owe any taxes. The act would increase the refundable amount to $1,800 for 2023, which could have been claimed when filing taxes this year. It would then increase to $1,900 for tax year 2024 and $2,000 for tax year 2025, with both amounts being adjusted for inflation.
Officials with the Internal Revenue Service said they were poised to retroactively apply the CTC to any taxes filed this year, with eligible filers receiving the money back in as little as two weeks after the bill’s passage.
Instead, the act remains in limbo in the Senate.
Sen. Josh Hawley, R-Missouri, told NBC News earlier this month the measure is “on life support.”
“This tax bill looks like, to me, it’s in very serious trouble,” Hawley added.
Advocated remain hopeful, however, pointing to COVID-era payments that help lift 16 million children out of poverty. The latest proposal could help boost 400,000 children above the poverty line, advocates noted.
If the measure does pass, qualifications would include:
- Have a modified adjusted gross income of $200,000 or less or $400,000 or less for couples filing jointly
- Dependent must have been under age 17 on Dec. 31, 2023.
- Each child must have a valid Social Security number
- The person being claimed must be your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of one of these (for example, a grandchild, niece or nephew)
- Dependents can provide no more than half of their own financial support during the year
- The dependent must have lived with the filer for more than half the year
- Not file a joint return with their spouse for the tax year or file it only to claim a refund of withheld income tax or estimated tax paid.