The COVID-19 outbreak three years ago spurred politicians to provide additional opportunities to assist families with children. Although the gains attained at the time were fleeting, a new bill could raise the child tax credit once more in 2024. The bipartisan plan put forth by House Ways and Means Committee Chairman Rep. Jason Smith (R-Mo.) and Senate Finance Committee Chairman Sen. Ron Wyden (D-Ore.) would significantly boost returns to the poorest families.
Child Tax Credit
The child tax credit only reimburses roughly 75% of the maximum credit permitted at tax time under the existing laws. In other words, candidates get a maximum of $1,600 out of the $2,000 allotted. Furthermore, the law’s main target audience is middle-class and upper-class households. The conditions include that the entire credit is available to families that have kids under the age of 17 and incomes up to $400,000 for co-filers and up to $200,000 for single filers. The amount available to low-income families will rise as a result of the bill.
Increase In Child Tax Credit
The sum will rise to $1,800 for 2023 taxes, up to $1,900 for 2024, and $2,000 for 2025 returns, plus an inflation adjustment of $100, if the idea is accepted. The subsidies would only be given to qualified families until 2025. Following that, new legislation or an extension of the program would need to be approved by Congress. A family’s annual income must be at least $2,500 to qualify. By the conclusion of the year, reported kids must be under the age of 17, and they cannot have supported themselves more than half of the time financially.
They must also, among other things, have been lawfully declared as the applicant’s dependents and have resided with them for over half the year. The goal of Wyden and Smith is to have the measure adopted before the start of the tax season on January 29. There are supporters of the idea on both sides of the political spectrum as well as opponents. Some lawmakers, from both parties, think there is no possibility the bill will pass before the due date unless it is attached to another priority item, like helping Israel and Ukraine or addressing the immigration crisis at the Mexican border.