Child Tax Credit – Did you hear the news that the IRS plans to begin paying children under six $300 each month and children aged six to seventeen $250 starting in July 2024? There has been widespread confusion because of this news that has gone viral. There is, however, no truth to this information. In this article, we aim to clarify the current regulations of the Child Tax Credit and point out the inaccuracies in the viral stories.
What Really Happened According to the False Claim
A mix-up with the temporary Child Tax Credit changes from the American Rescue Plan Act of 2021 is likely to have caused the confusion. Payments were made then to eligible families on a monthly basis between July and December 2021. However, those changes were temporary and are no longer in effect. Rather than directly benefiting children, these payments were intended for their parents or guardians.
What is the current Child Tax Credit (CTC)?
- The maximum credit amount per qualifying child is $2,000.
- Children under the age of 17 at the end of the tax year are eligible.
- There is a part of the CTC that is refundable if it exceeds the taxes owed, called the Additional Child Tax Credit (ACTC).
- Families with little or no tax liability can receive a refund of up to $1,400 per child through the ACTC.
Child Tax Credit Eligibility Criteria
- Individuals earning up to $200,000 and married couples earning up to $400,000 qualify for full credit.
- A child must live with the taxpayer for more than half the year and must be related to them.
- A child must not have paid for more than half of their own expenses.
The Temporary Changes for 2021 and the Current Rules
Children under six were temporarily permitted to receive $3,600 under the American Rescue Plan, and children from six to seventeen were temporarily permitted to receive $3,000 with monthly advance payments. Those changes ended in 2021, and the current regulations have returned to the pre-2021 structure. While the current regulations provide significant support, they are less generous than the temporary enhancements.
Politics and Future Proposals
In his 2025 budget, President Biden proposes bringing back the expanded CTC with monthly payments. In the Republican-controlled House of Representatives, however, there are significant political hurdles to overcome.
Child Tax Credit Conclusion
Child Tax Credit – It is false to claim that the IRS will begin paying child tax credit payments in July 2024. For accurate information on tax policies, consult reliable sources and official announcements.
