Child tax credit increase: Should you wait to file your taxes?

Child tax credit increase: Should you wait to file your taxes?

A plan that would increase the existing Child Tax Credit is currently in the hands of the U.S. Senate and that has some taxpayers wondering if they should wait to file their taxes to make sure they receive any expanded benefits.

There’s no need, according to IRS Commissioner Danny Werfel.

Speaking to lawmakers, Werfel said the IRS is prepared to make any needed adjustments for people who file before any changes are made by Congress.

READ MORE: Child tax credits: What’s the earliest you could see tax credit up to $7,430?

“Taxpayers should not wait for this legislation to file their returns. We will take care of getting any additional refunds to taxpayers who have already filed. They won’t need to take additional steps,” Werfel said.

According to IRS statistics, the tax agency has received 25.6 million tax returns since Jan. 29, the official start of processing. That figure is down some 11% from the same period the year before which did start a week earlier. The IRS has processed 25.4 million of its 2023 returns.

The bill, known as the Tax Relief for American Families and Workers Act, was overwhelmingly passed by the House and is now in the U.S. Senate. The measure would increase the maximum refundable amount per child over the next three years.

Currently, the child tax credit provides $2,000 but only $1,600 of that is refundable, meaning you get that as a refund even if you don’t owe any taxes. The bill would increase the maximum refundable amount to $1,800 for 2023, meaning you could claim it when filing your taxes in 2024. 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.

If passed by the Senate and signed by President Joe Biden, the increased CTC will retroactively be applied to 2023 taxes filed this year. Werfel said work on any tax returns that were filed before the changes become law could start ” as “early as six to 12 weeks after passage,” the commissioner said.