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UPDATE FOR FAMILIES: Congress could expand Child Tax Credits this year under the Tax Relief for American Families and Workers Act of 2024.

    1. If the bill gets passed, taxpayers that qualify for CTC will see a potential increase in their refunds. Currently, the refundable portion of the CTC is no more than $1,600.
    2. Under the new bill, the CTC would be increased to no more than $1,800 for tax year 2023 and no more than $1,900 for the next tax season.
    3. You can confidently file your taxes now.
    4. If the bill passes, it is very likely the IRS will automatically adjust the taxpayer’s already issued refund and apply the added credits. In that case, there is no need to amend your filed return.

What are Child Tax Credits, and why are they important?

When it comes to supporting families and ensuring children's well-being, Child Tax Credits play a significant role. In this Q&A style guide, we'll address common questions about Child Tax Credits, their qualifications, and the benefits they provide to parents.

Child Tax Credits are financial benefits offered to parents or guardians to alleviate the financial burden of raising children. They are a critical component of tax relief for families, providing financial support for the well-being of your children.

Who qualifies for Child Tax Credits?

To qualify for Child Tax Credits, several criteria must be met:

    • You must have a qualifying child, typically under the age of 17.
    • The child must be related to you and must have lived with you for at least half the year.
    • You must provide at least 50% of the child's financial support.
    • Your income must fall within certain limits, which vary based on your filing status.

How much can you claim with Child Tax Credits?

The amount you can claim with Child Tax Credits depends on several factors, including your income and the number of qualifying children. As of 2023, the maximum credit is $2,000 per child. If the credit exceeds your tax liability, you may be eligible for a refund of up to $1,600 per child.

Are there additional Child Tax Credits for specific situations?

Yes, in addition to the standard Child Tax Credit, there's the Additional Child Tax Credit. This credit is for families whose Child Tax Credit exceeds their tax liability. If you qualify, you may receive a refund of the excess credit amount.

How do you claim Child Tax Credits on your tax return?

To claim Child Tax Credits, you'll typically need to complete Schedule 8812 if you're filing Form 1040. Be sure to provide the necessary information about your qualifying child. Make sure to keep records of your child's Social Security number and related documentation.

Strategies for Maximizing Child Tax Credits

To maximize your Child Tax Credits, ensure you meet all the qualification criteria and claim the credit for every eligible child. Keep up with changes in tax laws, as they can affect the amount of credit you receive.

Importance of Proper Record keeping

Accurate record keeping is crucial when claiming Child Tax Credits. Maintain records of your child's Social Security number, proof of residency, and financial support. This documentation is essential to support your claims.

Let Liberty Tax Help

At Liberty Tax, we understand the importance of Child Tax Credits for families. If you have questions or need guidance on optimizing your tax situation, don't hesitate to reach out. Our experts are here to support you in ensuring the financial well-being of your family. Understanding and maximizing Child Tax Credits can make a substantial difference in your family's financial health. If you have more questions or require personalized assistance, do not hesitate to reach out to us. We're here to help you navigate the complexities of family finances and taxes.

*Every tax situation is unique. This is intended to provide generalized financial information designed to educate a broad segment of the public; this is not personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

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