Child Tax Credit Update: Get Your February Payment with This One Requirement!

As tax season kicks off, it’s crucial for families to check their eligibility for tax credits such as the Child Tax Credit, which could significantly reduce how much they owe to the IRS. Each year, around 48 million Americans claim the Child Tax Credit, yet many fail to take full advantage of it, even though they might qualify.

Save Up to $2,000 with the Child Tax Credit

The Child Tax Credit is designed to help families with qualifying children by providing a substantial tax reduction. With the rising cost of living, covering child-related expenses can be daunting, particularly for families with multiple children. This tax provision plays a crucial role in helping families manage these costs through government support.

For the tax year 2024/2025, you can claim up to $2,000 for each qualifying child under the Child Tax Credit. Additionally, up to $1,700 of this amount is refundable through the Additional Child Tax Credit. It’s important to note that eligibility for the Additional Child Tax Credit requires prior qualification for the Child Tax Credit. The main distinction here is that the Child Tax Credit reduces the taxes you owe, whereas the Additional Child Tax Credit can refund you up to $1,700 per child if you qualify.

Criteria for Qualifying for the Child Tax Credit

To qualify for the Child Tax Credit, according to the IRS, your child must meet the following criteria:

• Be under the age of 17 at the end of the tax year.
• Be your child, stepchild, eligible foster child, sibling, stepsibling, half-sibling, or a descendant of any of these (e.g., grandchild, niece, or nephew).
• Not provide more than half of their own support during the year.
• Live with you for more than half of the year.
• Be claimed as a dependent on your tax return and not be claimed by anyone else.
• Be a U.S. citizen, national, or resident alien.
• Have a valid Social Security Number issued before the due date of your tax return (including extensions).

Your income also affects your eligibility for the Child Tax Credit. Individuals must earn less than $200,000 per year, while married couples filing jointly must earn less than $400,000. Additionally, the IRS will not issue the Additional Child Tax Credit before mid-February, with payments expected by March 3, 2025.

Understanding the Additional Child Tax Credit

If you’re eligible for the Child Tax Credit and the credit amount exceeds the taxes you owe, you might also qualify for the Additional Child Tax Credit. For instance, if you’re eligible for a $4,000 tax break with two qualifying children but only owe $1,000 in taxes, you have a remaining credit of $3,000. This remaining amount can be refunded to you through the Additional Child Tax Credit, up to $1,700 per child, meaning you could receive up to $3,400 back. However, if the leftover credit after taxes is less than $3,400, you will receive only the leftover amount and not the additional possible $400.

It’s also crucial to be aware of other credits you may qualify for and to provide all necessary documentation when applying. If you file your tax return correctly and on time, you’ll soon benefit from additional funds that you can use as you see fit.