Posted on Thursday, February 13, 2025

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by RoseMark Advisors

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Are you wondering if the Child Tax Credit (CTC) can help your family during the 2024 tax season? Learn what the CTC is, who qualifies, and how to claim it to maximize your tax savings.

Key Highlights of the Child Tax Credit (CTC) for 2024

• The Child Tax Credit helps families offset the financial costs of raising children by reducing their federal income tax liability.
• For the 2024 tax year, the credit is worth up to $2,000 per qualifying child under age 17, with a refundable portion of up to $1,700 via the Additional Child Tax Credit (ACTC).
• The CTC is a partially refundable tax credit, meaning you may receive a refund even if your tax liability is zero.
• Children must meet specific age, residency, dependency, and citizenship criteria to qualify.
• The credit phases out for single filers with a modified adjusted gross income (MAGI) over $200,000 and joint filers with a MAGI over $400,000.
• Claiming the CTC requires filing Form 8812 along with your Form 1040.

What Is the Child Tax Credit?

The Child Tax Credit (CTC) is a federal tax benefit aimed at reducing the financial strain of raising children. For families with children under 17 years old, the CTC can reduce your federal income tax and potentially provide a refund if your tax liability is low.

This benefit can help cover everyday costs like school supplies, medical expenses, extracurricular activities, and groceries. By directly lowering your tax bill, the CTC puts more money back into your family’s budget.

Child Tax Credit 2024 Updates

For 2024, the maximum CTC remains at $2,000 per qualifying child, but the refundable portion known as the Additional Child Tax Credit (ACTC) increased to $1,700, up from $1,600 in 2023. If your tax liability is zero, you may be eligible for a refund of the ACTC, depending on your income and other factors.

This increase is especially beneficial for families with lower incomes, providing additional financial relief during the tax season. However, keep in mind that monthly Child Tax Credit payments, like those seen in 2021, are no longer available in 2024. The CTC is only claimable when you file your tax return.

Will there be a monthly $300 Child Tax Credit payment for 2024?

No, there will not be a $300 monthly advance payment for the Child Tax Credit in 2024. While legislation was proposed to reinstate monthly CTC payments, it did not pass. Instead, the CTC is a partially refundable credit, which means you must file a tax return to claim it.

Child Tax Credit 2024 Payment Structure

Eligible families can receive a $2,000 tax reduction per qualifying child when filing their tax return. If the credit exceeds your tax liability, you may receive up to as a refund through the ACTC.

To qualify for the Child Tax Credit, your child must:

• Be under 17 years old at the end of the tax year.
• Live with you for more than half the year, excluding temporary absences like school or vacations.
• Be your dependent and not provide more than half of their own financial support.
• Meet citizenship requirements, including being a U.S. citizen, national, or resident alien.

Your Modified Adjusted Gross Income (MAGI) and filing status also affect eligibility and the amount of credit you can claim.

How to Claim the Child Tax Credit

Claiming the Child Tax Credit involves:

1. Gathering Required Documents: Have Social Security numbers for each qualifying child, as well as income documents like W-2s or 1099s.
2. Filing Your Tax Return: Calculate your credit and report it on your Form 1040.

If you have dependents who don’t qualify for the CTC, you may claim the Credit for Other Dependents (ODC)– a nonrefundable $500 credit per dependent, such as older children or other relatives.

The Child Tax Credit provides financial relief to families, helping to offset the costs of raising children. Understanding how it works and when you can claim it ensures you maximize its benefits and avoid missing out on valuable refunds.

Consult with a Professional to Maximize Benefits

While a tax professional can help you navigate your return, you should consider working with a financial advisor beforehand to minimize your tax burdens. Did you know that Rosemark Advisors are the exclusive provider of financial services for AMAC members?

Rosemark Financial Advisors can help with all your planning needs from employer sponsored salary deferrals, income tax engineering for small business owners to tax loss harvesting on investments, ensuring you get the most out of your tax return.

Ready to get started? Contact Rosemark Advisors today!