Child Tax Credit 2024
Published on August 22, 2024
by Jeff Patterson
Jeff Patterson is an American living in Scotland and joined the team at Expat Tax Online after experiencing the complexities of living abroad with a family.
Table of Contents
What exactly is the Child Tax Credit (2024)?
The Child Tax Credit (CTC) is a tax benefit provided to help parents or guardians with the costs of raising children. It works by reducing the amount of federal income tax you owe, giving families some financial relief.
Are you living abroad? Here’s what you need to know
If you’re living outside the United States, you may qualify for a version of the Child Tax Credit called the Additional Child Tax Credit (ACTC). This is different from the regular CTC and the Advanced Child Tax Credit, so it’s important to make sure you’re claiming the right one.
Who can get the Additional Child Tax Credit in 2024?
To qualify for the ACTC in 2024, you need to meet certain requirements:
- Child’s Age: Your child must be under 17 by the end of the tax year.
- Relationship: The child must be your son, daughter, stepchild, foster child, sibling, or a descendant of any of these.
- Dependent Status: You must list the child as a dependent on your tax return.
- Citizenship: The child needs to be a US citizen, US national, or US resident alien.
- Social Security Number (SSN): Your child must have an SSN issued before the tax year ends.
- Living Situation: The child must have lived with you for more than half of the tax year.
- Financial Support: The child should not have paid more than half of their own expenses.
I want to know more about US taxes abroad
Have there been any changes to eligibility?
The eligibility rules for the ACTC haven’t changed recently, but there have been updates to other types of Child Tax Credits.
It’s a good idea to stay informed about these changes.
How much is the Child Tax Credit worth in 2024?
For 2024, the Child Tax Credit offers up to US$2,000 for each child under 17.
If you owe US$2,000 in taxes, the credit can cancel that out entirely. However, if you don’t owe taxes, you can get a refund of up to US$1,600 per child through the ACTC.
Does the child’s age affect the credit amount?
No, the credit amount doesn’t change based on your child’s age, as long as they are under 17 at the end of the year.
How do you claim the Child Tax Credit?
Here’s how you can claim the Child Tax Credit:
- Check If You Qualify: Make sure your child meets the eligibility criteria.
- Fill Out Your Tax Return: Use Form 1040 or Form 1040-SR to file your federal taxes.
- Include Child Details: Provide your child’s name, SSN, and your relationship to them on the tax return.
- Calculate the Credit: Use the Child Tax Credit Worksheet (Schedule 8812) to figure out how much you can claim.
- File Your Return: Submit your tax return to the IRS, making sure everything is correct to avoid any delays.
Is the Child Tax Credit refundable?
Yes, it is. If the credit amount is more than the taxes you owe, you can get the rest back as a refund. For 2024, you could receive up to US$1,600 per child as a refund.
How does your income affect the Additional Child Tax Credit?
The amount of Additional Child Tax Credit (ACTC) you can receive depends on your income. There are specific income limits where the credit starts to decrease or “phase out.”
- Single Filers: If your adjusted gross income (AGI) is above US$200,000, the credit starts to decrease.
- Married Filing Jointly: For couples filing jointly, the phase-out begins at US$400,000.
Once your income exceeds these amounts, your credit is reduced by US$50 for every US$1,000 over the limit until it phases out entirely.
Example 1: A married couple filing jointly with an AGI of US$350,000 and two kids can still claim the full credit of US$3,200 (US$1,600 per child) because their income is below the US$400,000 limit.
Example 2: A single filer with an AGI of US$210,000 and one child will see a reduction in their ACTC. Their income is US$10,000 over the US$200,000 threshold, so their credit is reduced by US$500 (US$50 for each US$1,000 over the limit), leaving them with US$1,100.
Can self-employed qualify for the Additional Child Tax Credit?
Yes, if you’re self-employed, you can still qualify for the Additional Child Tax Credit as long as you meet the requirements.
Your self-employment status doesn’t affect your eligibility for the ACTC.
You just need to ensure your child qualifies based on age, relationship to you, dependency, citizenship, residency, and financial support.
Has the Additional Child Tax Credit changed for children with disabilities?
For 2024, there haven’t been any specific changes to the Additional Child Tax Credit for children with disabilities.
Parents or guardians of children with disabilities are still eligible for the ACTC under the same rules as other children. Additionally, other tax credits like the Earned Income Tax Credit (EITC) or the Credit for Other Dependents might offer extra financial benefits.
It’s a good idea to speak with a tax professional to ensure you’re taking advantage of all the tax credits available to you.
How does the Additional Child Tax Credit work with other tax credits?
You can claim the ACTC along with other credits like the Earned Income Tax Credit (EITC), the Credit for Other Dependents, and the Child and Dependent Care Credit.
However, each credit has its own set of rules, so you’ll need to calculate them separately on your tax return.
What if your income changes during the year?
If your income changes during the year, it can impact how much ACTC you receive.
A significant increase in income might reduce your credit, while a decrease in income could make you eligible for a larger credit or even a refund through the refundable ACTC.
Can a non-custodial parent claim the Additional Child Tax Credit?
Usually, the parent who has the child living with them for most of the year—the custodial parent—claims the ACTC.
However, the non-custodial parent can claim the credit if the custodial parent signs Form 8332, allowing them to do so. After which, this form must be attached to the non-custodial parent’s tax return to claim the credit.
