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When Will the Child Tax Credit Bill Pass? What You Need to Know

The child tax credit is a tax benefit that helps millions of families with children. But what is the status of the bill that would expand it? Here’s what you need to know.

What is the Child Tax Credit?

The child tax credit (CTC) is a tax break that reduces your tax liability by a certain amount for each qualifying child you have. For the 2023 tax year, the CTC is worth $2,000 per child under age 17, and up to $1,400 of it is refundable, meaning you can get it as a refund even if you don’t owe any taxes.

 

To qualify for the CTC, you need to have a child who meets certain criteria, such as being your dependent, living with you for more than half the year, and having a Social Security number that is valid for employment in the U.S. You also need to have a certain level of income, as the CTC phases out for higher earners.

What is the Child Tax Credit Expansion Bill?

The child tax credit expansion bill is a proposal that would make several changes to the CTC, such as:

– Increasing the amount of the credit to $3,000 per child ($3,600 for children under age 6) for the 2024 tax year
– Making the credit fully refundable, so you can get the full amount regardless of your tax liability
– Allowing parents to use their income from either the current or prior year to calculate the credit, which can help if your income drops and you can’t qualify for the credit
– Multiplying the parent’s income by 15% and by the number of children to determine the credit, which can benefit families with low incomes and multiple children

The bill, called the Tax Relief for American Families and Workers Act of 2024, was passed by the House of Representatives on February 3, 2024, with bipartisan support. It now moves to the Senate, where it faces an uncertain fate.

Why is the Child Tax Credit Expansion Bill Important?

The child tax credit expansion bill is important because it could provide significant financial relief to millions of families with children, especially those who are struggling with poverty or low incomes. According to the Center on Budget and Policy Priorities, the bill could lift as many as 400,000 children above the poverty line and give more financial support to an additional 3 million children in families with incomes below the poverty line.

The bill could also help families cope with the rising costs of raising children, such as childcare, education, health care, and food. The bill could also stimulate the economy by increasing consumer spending and creating jobs.

How Can You Benefit from the Child Tax Credit Expansion Bill?

If the child tax credit expansion bill becomes law, you could benefit from it in several ways, depending on your situation. Here are some examples:

– If you have a child under age 6, you could get up to $3,600 per child for the 2024 tax year, instead of $2,000. That’s an extra $1,600 per child, or $133 per month.
– If you have a child between age 6 and 16, you could get up to $3,000 per child for the 2024 tax year, instead of $2,000. That’s an extra $1,000 per child, or $83 per month.
– If you have little or no income, you could still get the full amount of the credit, instead of getting a reduced or zero credit. For example, if you have two children under age 6 and no income, you could get $7,200 for the 2024 tax year, instead of $2,800.
– If you have a lower income than the previous year, you could use your prior year income to calculate the credit, which could result in a higher credit. For example, if you have one child under age 6 and your income dropped from $50,000 in 2023 to $30,000 in 2024, you could use your 2023 income to get a $3,600 credit, instead of a $2,700 credit.

FAQs about the Child Tax Credit Expansion Bill

Here are some frequently asked questions and answers about the child tax credit expansion bill:

– Q: When will the child tax credit bill pass?
– A: The child tax credit bill has passed the House of Representatives, but it still needs to pass the Senate and be signed by the President before it becomes law. There is no set date for when the Senate will vote on the bill, and it could face opposition or amendments from some senators. It is possible that the bill could pass before the end of 2024, but it is not guaranteed.

– Q: How do I claim the child tax credit?
– A: You can claim the child tax credit by entering your children and other dependents on Form 1040, U.S. Individual Income Tax Return, and attaching a completed Schedule 8812, Credits for Qualifying Children and Other Dependents. You can also use the IRS Interactive Tax Assistant to check if you qualify for the credit.

– Q: How will I receive the child tax credit?
– A: You will receive the child tax credit as a reduction of your tax liability when you file your tax return, or as a refund if you don’t owe any taxes. Unlike the 2021 child tax credit, which was paid out in six monthly payments during the second half of the year, the 2024 child tax credit would not be paid out in advance, unless Congress decides to change that.

– Q: What if I have a child in 2024?
– A: If you have a child in 2024, you can claim the child tax credit for that child, as long as the child meets the eligibility criteria and has a Social Security number that is valid for employment in the U.S. You can also update your information with the IRS to ensure that you receive the correct amount of the credit.

– Q: What if I share custody of my child with another parent?
– A: If you share custody of your child with another parent, you can claim the child tax credit for that child only if you are the custodial parent, meaning the parent who has the child for more than half the year. If you and the other parent have the child for an equal amount of time, the parent with the higher adjusted gross income can claim the credit.

Conclusion

The child tax credit is a valuable tax benefit that helps families with children. The child tax credit expansion bill is a proposal that would increase the amount and availability of the credit for the 2024 tax year, potentially benefiting millions of families and children. However, the bill still needs to pass the Senate and be signed by the President before it becomes law, and there is no guarantee that it will happen.

 

If you want to learn more about the child tax credit and how it could affect you, you can visit the [IRS website](https://www.irs.gov/credits-deductions/individuals/child-tax-credit) or consult a tax professional. You can also contact your senators and urge them to support the bill, if you think it would help you and your family.