The maximum credit amount is $500 for each qualifying person. The credit begins to decrease in value if your adjusted gross income exceeds $200,000 ($400,000 for married filing jointly).
Your income is probably too low. The child tax credit (CTC) is limited to your tax liability. The CTC is a non-refundable credit and can only reduce your income tax to 0, It can not help you beyond eliminating your tax liability.
7) Family income test - The Child Tax Credit is reduced if your modified adjusted gross income (MAGI) is above certain amounts, which are determined by your tax-filing status. For the 2024 and 2025 tax years, the phaseout of the credit begins with $200,000 in income ($400,000 for Married Filing Jointly).
The maximum refundable credit amount is calculated by multiplying a family's earned income above $2,500 by 15%. This provision modifies the formula so that the refundable amount is multiplied by the number of qualifying children.
The base credit is worth $2,000, but it phases out based on modified adjusted gross income (MAGI) levels, meaning high earners may receive a smaller credit or be ineligible. As a nonrefundable tax credit, the CTC reduces taxes owed dollar-for-dollar, though some people may qualify for a partial refund.
The nonrefundable Child Tax Credit can reduce your tax to zero. If the amount of your credit is higher than the taxes you owe, you don't “get back” the rest of the credit as a refund, but you may be eligible for the additional child tax credit.
If you owe money to a federal or state agency, the federal government may use part or all of your federal tax refund to repay the debt. This is called a tax refund offset. If your tax refund is lower than you calculated, it may be due to a tax refund offset for an unpaid debt such as child support.
The more money you make, the smaller the tax credit you'll receive. The 35 percent maximum rate phases out once a taxpayer earns more than $15,000 a year, until it reaches 20 percent when a household makes $43,000 or more in adjusted gross income.
You can't claim the EIC unless your investment income is $11,600 or less. If your investment income is more than $11,600, you can't claim the credit. Use Worksheet 1 in this chapter to figure your investment income.
After 2025, the CTC is scheduled to revert to its pre-TCJA form. At that point, taxpayers will be able to claim a credit of up to $1,000 for each child under age 17 and the credit will be reduced by 5 percent of adjusted gross income over $75,000 ($110,000 for married couples).
You qualify for the full amount of the 2024 Child Tax Credit for each qualifying child if you meet all eligibility factors and your annual income is not more than $200,000 ($400,000 if filing a joint return).
The Child Tax Credit may be limited or excluded based on two main factors: the taxpayer's tax liability and their earned income exceeding the phaseout thresholds set by the IRS. Tax liability refers to the amount of tax a taxpayer owes after deductions and credits.
If you have 1 dependent with qualifying care costs of $3,000 and your AGI is over $43,000, your tax credit would be worth $600, because that's 20% (the percentage aligned with your income level) of $3,000 (your maximum allowable expenses for 1 child).
In some cases, a taxpayer qualifies and gets less than the full credit. These taxpayers must have earned income of at least $2,500 to receive a refund, even if they owe no tax, with the additional child tax credit. The credit begins to phase out at $200,000 of modified adjusted gross income.
No. The child tax credit is a credit for having dependent children younger than age 17. The Earned Income Credit (EIC) is a credit for certain lower-income taxpayers, with or without children. If you're eligible, you can claim both credits.
Your 2024 Child Tax Credit might be less than your 2023 credit due to: One or more of children celebrated their 17th birthday in 2024. One or more children lived with you for less than half the year in 2024 but lived with you for half the year (or more) in 2023.
The Additional Child Tax Credit is the refundable portion of the Child Tax Credit. It is claimed by families who owe the IRS less than their qualified Child Tax Credit amount. For 2023, the Additional Child Tax Credit will refund eligible taxpayers up to $1,600. For 2024, it's $1,700.
What's changed about the CTC for the 2024 tax year? The CTC is still worth up to $2,000 per qualifying child. However, the refundable portion, known as the Additional Child Tax Credit (ACTC), is worth up to $1,700 (it was worth up to $1,600 in 2023).
The child tax credit is nonrefundable. A refundable tax credit allows taxpayers to lower their tax liability to zero and still a receive a refund. The additional child tax credit is refundable. A dollar-for-dollar reduction in the tax.
Earned Income Requirement: You (and your spouse in the case of a joint return) must have earned income during the year to claim the credit. See Q16 and Q17 for more information, including special rules that may apply if you are a student or are unable to care for yourself.
To meet the qualifying child test, your child must be younger than you or your spouse if filing jointly and either younger than 19 years old or be a "student" younger than 24 years old as of the end of the calendar year.