Last week, the House introduced expansions to the 2024 Child Tax Credit scheme by passing a bill known as The Tax Relief for American Families and Workers Act of 2024. Low-income families with multiple children are set to find this development particularly relieving. This federal tax benefit serves as financial assistance for families with dependent children under 17. The benefits can be significant, potentially leading to a substantial reduction in one’s tax bill.
Nevertheless, not everyone can access this credit. Taxpayers must meet specific eligibility criteria, which include several checkpoints. Here’s how the CTC expansion could impact qualifying families. Currently, for each qualifying dependent under 17 years old, the CTC stands at $2000 per child, with a potential refund of $1600. If the bill is approved, the refundable credit amount could increase to $1800 for 2023 tax returns and further rise to $1900 and $2000 for 2024 and 2025 tax returns, respectively.
What does the expansion of the Child Tax Credit 2024 entail?
Should the Senate also give its approval to the bill, low-income Americans will be among the primary beneficiaries. Furthermore, lower-income families will experience a positive impact through increased tax credits for rental housing construction, with The Hill estimating this impact to benefit around 200,000 housing units nationwide.
To be eligible for CTC refunds, households must have at least $2500 in income. Additionally, eligible children must possess a valid social security number for employment in the US to qualify for the full credit:
- The child must be under 17 years of age by the end of the tax year.
- The qualifying child can be your son, daughter, stepchild, foster child (if eligible), brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of any of these, such as a grandchild, nephew, or niece.
- The child must receive half or less of their financial support from you during the year.
- The child must have lived with you for more than half of the year.
- Your tax return must correctly identify the child as your dependent.
- The child cannot file a joint tax return with their spouse for the tax year or can only do so to claim a refund of withheld income tax or estimated tax paid.
- The child must be a US citizen, US national, or US resident.
According to the Tax Policy Center, households benefiting from the tax credit would receive a tax reduction of $680 in 2023. Nearly half of households earning less than $21,000 annually would benefit from this reduction, and a quarter of households earning less than $40,500 annually would also fall into this category. Even the top 1% of income earners, those with incomes exceeding $980,000, would receive this benefit. Overall, more than 16% of Americans would see a decrease in their tax bills.
Alaska Residents to Receive Stimulus Checks of up to $1,312
A direct payment of $1,312 is set to be issued to select residents of Alaska within the next days. The Alaska Department of Revenue is initiating disbursements from the Permanent Fund Dividend to a new group of eligible residents who are yet to receive their dividend checks.
Individuals with an “Eligible-Not Paid” status as of the previous Wednesday and who have not received their Permanent Fund Dividend (known as PFD) payments for 2023 or earlier will receive their checks through the state program on Thursday.
Applications for the 2024 Permanent Fund Dividend are currently open and will continue to be accepted until March 31. Eligible Alaskans can conveniently complete the program’s online form or opt for a traditional paper submission. To qualify for the PFD program, Alaskans must have the intention of maintaining residency in the state indefinitely and should not have a felony conviction, among other requirements.
The state program issues annual payments based on Alaska’s mineral revenues for the corresponding year. The 2023 PFD checks provided eligible Alaskans with payments totaling $1,312, with distribution commencing in October 2023.
“The 2023 PFD marks the 42nd year Alaskans have received their share of the state’s natural resource wealth,” Alaska Department of Revenue Commissioner Adam Crum said in a statement about the 2023 payment. “I would like to thank our Permanent Fund Dividend Division for their tireless work year-round in administering the program and processing the applications.”