As the new year approaches, tax season looms on the horizon, and the Internal Revenue Service (IRS) is preparing taxpayers with updates and changes for filing their 2024 tax returns. One key announcement is the return of the Child Tax Credit (CTC), a vital benefit for families with qualifying children.
What Is the Child Tax Credit (CTC)?
The CTC is a one-time tax refund aimed at families with eligible children. Even families who might not typically file a tax return can benefit if their children meet specific requirements, including:
- Having a valid Social Security number for U.S. employment.
- Being under 17 years old at the end of the year.
- Being closely related to the taxpayer (e.g., child, stepchild, sibling, or descendant such as a grandchild or niece).
- Providing no more than half of their financial support during the year.
- Living with the taxpayer for over half the year.
- Being claimed as a dependent on the taxpayer’s return.
- Not filing a joint return unless claiming a tax refund.
- Being a U.S. citizen, national, or resident alien.
If a child meets all these conditions, taxpayers can claim up to $1,700 per qualifying dependent by completing Form 1040.
Additional Benefits with Form 1040: The Earned Income Tax Credit (EITC)
The IRS also encourages taxpayers to consider the Earned Income Tax Credit (EITC), which can provide refunds of up to $6,728 for families with three or more qualifying children. The EITC targets low- to moderate-income workers, and eligibility depends on factors like income level, number of dependents, and employment status.
Key criteria to qualify for the EITC include:
- Having earned income during the year.
- Keeping investment income below $11,950 (for 2025).
- Possessing a valid Social Security number by the return’s due date.
- Being a U.S. citizen or resident alien all year.
- Avoiding Form 2555, which pertains to foreign-earned income.
- Meeting additional rules for separated spouses not filing jointly.
Families can claim both the CTC and the EITC, potentially reducing their tax liability and increasing their refunds.
Why These Credits Matter
The CTC and EITC provide critical financial relief to families across the United States. Official data reveals that nearly 48 million adults benefit from the CTC, strengthening household stability and reducing economic burdens. When combined with the EITC, these credits offer a powerful way for families to lower their tax obligations and improve their financial outlook.
Important Deadlines
The IRS reminds taxpayers that 2024 tax returns are due in April 2025. While extensions are available if requested on time, filing early ensures timely processing and quicker access to refunds that can help manage early-year expenses.
Start preparing now to maximize these benefits and ensure a smoother tax season. For more information and detailed instructions, visit the official IRS website.
