Remaining Child Tax Credit Payments in the US – What to Expect Until the End of the Year

The Child Tax Credit (CTC) has been an essential financial support system for U.S. families, offering valuable relief, especially after recent changes. As we approach the end of 2024, families may be wondering about what remaining payments and benefits are available. Here’s an overview of the Child Tax Credit, eligibility, payment expectations, and additional financial assistance.

Overview

The Child Tax Credit allows qualifying families to claim up to $2,000 per child under 17 on their tax returns. However, in 2021, due to pandemic-related measures, this amount was temporarily increased. Families could receive up to $3,600 per child under 6 and $3,000 for children aged 6 to 17. While this boost provided timely relief, it expired, and for 2024, the credit has reverted to its pre-pandemic maximum of $2,000 per child.

Payments

Unlike in 2021, when families received monthly advance payments of the Child Tax Credit, no such advance payments will be available for the remainder of 2024. Instead, families will need to wait until filing their 2024 tax returns in 2025 to claim the credit.

When families file taxes, the Child Tax Credit will either reduce their tax liability or increase their tax refund. For many families, this might mean receiving a lump sum, rather than the monthly installments they may have become used to. As a result, families need to plan their finances accordingly.

Eligibility

To receive the full $2,000 credit per child, certain income thresholds must be met. The credit is available to families with an annual income of up to $200,000 for single filers and $400,000 for married couples filing jointly. For incomes above these thresholds, the credit gradually decreases.

Another important feature of the Child Tax Credit is that up to $1,400 is refundable. This means even if your tax liability is less than the credit amount, you may still receive up to $1,400 per child as a refund, known as the Additional Child Tax Credit (ACTC). However, if you owe little to no taxes, you may not receive the full $2,000 per child.

Extra Support

In addition to the federal CTC, some states offer additional child tax credits, which can help further reduce the financial burden on families. For example, states like California and New York have introduced their own credits ranging from $250 to $1,000.

These state-level benefits are generally claimed when filing state tax returns. However, eligibility criteria and amounts vary, so it’s important to check with your state’s tax office for details.

Financial Planning

For families accustomed to receiving monthly advance payments in 2021, the switch back to an annual lump sum payment requires a shift in financial planning. While it might seem like a financial setback at first, this larger payment during tax season can also help cover significant expenses like school fees, summer programs, or family trips.

Families should consider reviewing their current tax situation to prepare for this change. If you’re uncertain about how the shift from monthly payments to a lump sum might impact your tax return or financial situation, seeking advice from a tax professional is recommended.

Maximizing Benefits

Apart from the Child Tax Credit, families may also be eligible for other tax benefits, such as the Earned Income Tax Credit (EITC) and the Child and Dependent Care Credit. These credits can further reduce a family’s tax burden, especially for those with low to moderate incomes. Claiming these credits alongside the CTC can maximize the financial benefits for qualifying households.

Staying updated on both federal and state tax benefits is essential. With ongoing political discussions, potential reforms, and budget negotiations, the rules surrounding these credits may change, making it important to keep an eye on legislative updates.

The Child Tax Credit remains a valuable resource for millions of families. Although the enhanced version is no longer in place, the available benefits still provide substantial financial support. Careful financial planning and staying informed about available tax credits will ensure that families make the most of these opportunities during tax season.

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