The federal child tax credit (CTC) allows eligible parents and caregivers to reduce their tax liability and might result in a tax refund. However, not everyone can claim the credit, and credit amounts can differ for those who can.
The 2024 child tax credit is based on income, filing status, the number of children, and whether the IRS considers your dependent a qualifying child.
Here is what else you need to know about the child tax credit, including how much (if anything) you can expect next year andthe child tax credit challenges facing Congress.
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Child Tax Credit Overview
What is the child tax credit?
The child tax credit is a key tax break that supports as many as 40 million U.S. families each year to raise their children.The CTC currently provides up to $2,000 per child under 17 under the 2017 Tax Cuts and Jobs Act (TCJA).
- If the CTC exceeds taxes owed, families may receive up to $1,700 per child as a refund for the 2024 tax year.
- Credit for Other Dependents: Other dependents, including those of any age, including 18 or older, and full-time students ages 19 through 24 might be eligible to receive a nonrefundable credit of up to $500 each.
There are also phase-out thresholds for higher-income taxpayers. For instance, the child tax credit starts phasing out for a head of household earning $200,000 a year and $400,000 for married couples filing jointly.
Note: It's important to know that the child tax credit differs from the child and dependent care credit. The federal Credit for Child and Dependent Care expenses can be helpful if you paid someone to care for your child or other qualifying dependent so that you (and your spouse if filing jointly) could work or look for work. Your federal income tax may be reduced by claiming the credit for child and dependent care expenses on your tax return. For more information, see Kiplinger's report Is Summer Camp Tax Deductible?
Data show the child tax credit has helped reduce child poverty. However, unless Congress acts, the federal child tax credit is set to revert to $1,000 per qualifying child in 2026. And the age limit for eligible children would be decreased to 16.These changes would be due to the scheduled expiration of certain provisions in the TCJA. (More on that below.)
Child Tax Credit 2024 Amount
How much will your child tax credit be for 2024?
The CTC for the 2024 tax year is worth up to $2,000 per qualifying child under 17.
However, the credit is not a fully refundable tax credit. So, you cannot receive the entire $2,000 back as a tax refund, even if you have a $0 tax liability and qualify for the full credit amount.
But there is some good news. This tax break has a refundable portion (the additional child tax credit) — more on that below. Better yet, due to inflation adjustments, the refundable amount is higher for 2024 than a year ago.
- For 2024, (returns you’ll typically file in early 2025) the refundable portion of the child tax credit is $1,700.
- For the prior 2023 tax year, only $1,600 was refundable.
Note: Remember, if you are eligible, you may get a refund of less than $1,700. That figure is the maximum amount of the refundable portion. How much you qualify for in tax credits depends on your annual income.
If you want to know how much child tax credit you currently qualify for, you can calculate this using the IRS' Interactive Tax Assistant tool online.
Additional Child Credit
What is the additional child tax credit?
The child tax credit can lower your tax liability by $2,000 per qualifying child. However, this tax credit isn’t refundable. That means if you owe less than $2,000 in taxes, you won’t get the unused portion of the credit as a refund.
However, the additional child tax credit (ACTC) allows you to receive up to a maximum of $1,700 per child as a refund for the 2024 tax year. You can receive the maximum amount of the ACTC after your tax bill is reduced to zero.
CTC Requirements
Who qualifies for the child tax credit?
Not everyone will qualify for the child tax credit, and your income isn’t the only determining factor. The IRS also has seven guidelines you and your qualifying child must meet to be eligible for the child tax credit.
The following must apply for your household to qualify:
- Age: The child must be under age 17 at the end of the year.
- Relationship: The child 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).
- Financial support: Children cannot provide more than half of their financial support during the year.
- Residency: Children claimed under the CTC must live with you for more than half the year.
- Dependent status: The child must be claimed as a dependent on your tax return.
- Filing status: Dependents cannot file a joint return with their spouse unless they file it to claim a refund of withheld income taxes or estimated taxes paid.
- Citizenship: The child must have been a U.S. citizen, U.S. national, or U.S. resident alien during the tax year.
CTC Income Limits
What are the child tax credit 2024 income limits?
As mentioned, the child tax credit amount you can expect on your refund will depend on your modified adjusted gross income (MAGI). Once your income reaches a certain limit, the credit amount will decrease or completely phase out.
The credit amount will be reduced by $50 for every $1,000 above your income cap. For instance, your child tax credit will begin to phase out once your MAGI exceeds:
- $200,000 for a single filer, head of household, or qualifying widower.
- $400,000 for those married filing jointly.
- $200,000 for those married, filing separately.
What about households that don’t normally file tax returns?
Your family can be eligible for the child tax credit even if you do not earn enough income to need to file a tax return, but how much you get will depend on your annual earnings. Just as the CTC has a phase-out threshold, it also has a phase-in amount.
To qualify for the credit, families must earn at least $2,500 per year, and the CTC then phases in a rate of 15% per dollar earnings over that amount. Additionally, if you have three or more qualifying children, you may be eligible for other tax breaks like the Earned Income Tax Credit (EITC).
How to Claim the CTC
How to claim the child tax credit
You can claim the child tax credit by entering your children or dependents on your federal income tax return (Form 1040). You’ll attach a completed Schedule 8812 (Credits for Qualifying Children and Other Dependents).
That IRS form will also help you determine how much of the CTC you’re eligible for and if you will receive additional tax credits.(Note: If you use tax software, the system will walk you through this with prompts. If you use a tax preparer, they will handle this for you.)
New Child Tax Credit Update
What’s next for the child tax credit?
The future of the child tax credit is being debated in Congress.
Years ago, the TCJA doubled the child tax credit to $2,000 per child, with a $1,700 refundable portion in 2024 phased in starting at $2,500 in earned income. It also temporarily increased the qualifying age of children or dependents up to 17.
However, without action from Congress, the child tax credit will revert to $1,000 per child ages 16 and under once the TCJA tax cuts expire. The credit would be refundable and phased in starting at $3,000 of earned annual income.
The failure to reach a deal to expand the CTC has long plagued Congress.
Congress has yet to negotiate a successful bipartisan agreement to expand the child tax credit. The bipartisan tax package recently failed a procedural vote and remains stalled in the U.S. Senate. If passed, the bill would benefit as many as 16 million children who don’t get the full credit due to their parent’s incomes, according to estimates from the Center on Budget and Policy Priorities (CBPP).
Within the first year, the legislation was projected to lift as much as 400,000 children from poverty, and half a million or more would have been lifted from poverty when in full effect.
Child tax credit: What you can do
(Image credit: Getty Images)
The child tax credit could be a key tax policy point in the 2024 presidential election. For example, Vice President and Democratic presidential nominee Kamala Harris, has called for an expanded CTC. On the Republican ticket, JD Vance has also floated an increased child tax credit.
So, as the election cycle progresses, stay tuned to what candidates have to say on the issue and any changes that come through Congress.
Otherwise, make sure you are claiming all the tax credits and deductions you are entitled to. Consider the child and dependent care credit and other tax credits for families that can help lower your tax liability.
Also, see what state child tax credits and deductions are available to help you and your family save money.
Related Content
- What's Happening With Congress and the New Child Tax Credit
- What States Have Expanded Child Tax Credits This Year?
- A Bunch of IRS Tax Credits and Deductions You Need to Know
- Does Your Child Need to File a Tax Return?
