$1,700 Additional Child Tax Credit For These People: Know Eligibility & More Details

For families in the U.S. facing financial challenges, the Child Tax Credit (CTC) offers much-needed relief.

In 2024, families can claim up to $2,000 per child under the age of 17. While the credit is non-refundable, meaning it can only reduce your tax liability, many families can still receive up to $1,700 in refunds through the Additional Child Tax Credit (ACTC) if they don’t owe enough in taxes.

Here’s how you can maximize this benefit and what you need to know to get your refund.

Understanding the Child Tax Credit

The Child Tax Credit provides tax relief to families with dependents under 17 years old. The maximum credit per child is $2,000, which helps reduce your tax liability.

However, if you owe less in taxes than the value of the credit, you may not be able to fully utilize the non-refundable portion of the credit.

This is where the Additional Child Tax Credit (ACTC) comes in, allowing eligible families to receive up to $1,700 in refunds even if their tax bill is zero or less than the credit amount.

How the Additional Child Tax Credit Works

The ACTC is a refundable portion of the Child Tax Credit. If the CTC reduces your tax liability to zero but does not fully absorb the credit’s value, you may still qualify to receive the $1,700 as a refund.

• Non-Refundable Credit: The first part of the CTC, up to $2,000, is used to reduce your tax liability.
• Refundable Credit (ACTC): If you owe less in taxes than the value of the non-refundable credit, you may receive up to $1,700 as a refund.

Child Tax Credit Amounts and Income Thresholds

The maximum Child Tax Credit amount is $2,000 per child. However, the credit is subject to income thresholds, which reduce the credit for higher-income individuals and families:

• Married couples filing jointly: Income must be $400,000 or less to claim the full credit.
• All other filers: Income must be $200,000 or less to claim the full credit.

For every $1,000 that your income exceeds these thresholds, the credit is reduced by $50. Despite this reduction, the refundable Additional Child Tax Credit remains available for eligible families, up to $1,700.

Eligibility for the Child Tax Credit and Additional Child Tax Credit

To qualify for the Child Tax Credit and the ACTC, families must meet specific requirements:

Child Eligibility Criteria

• The child must be under 17 years old at the end of the tax year.
• The child must be your son, daughter, stepchild, adopted child, or a relative such as a brother, sister, step-sibling, or their descendants.
• The child must have a valid Social Security Number (SSN) issued by the Social Security Administration for work authorization.
• The child must live with you for at least half of the year.
• The child cannot file a joint tax return with a spouse (unless they are only filing to claim a refund).
• The child must rely on you for at least half of their financial support during the year.
• The child must be a U.S. citizen, U.S. national, or a resident alien.

How to Claim the Child Tax Credit and Receive Your Refund

If you’re eligible for the Child Tax Credit, claiming it on your tax return is simple:

1. File Your Tax Return: You can claim the Child Tax Credit when you file your taxes. Make sure to declare each qualifying child and provide their valid Social Security Numbers.
2. Calculate Your Tax Liability: Determine your tax liability for the year. The non-refundable portion of the CTC will reduce your liability, but if your liability is less than the credit amount, you may qualify for the Additional Child Tax Credit.
3. Apply for the Additional Child Tax Credit: To receive the refundable portion (up to $1,700), you need to file Schedule 8812 (Credits for Qualifying Children and Other Dependents) along with your tax return. This form helps the IRS calculate how much of the credit you are eligible to receive as a refund.
4. Income and Refund Calculation: The ACTC is based on your earned income. If your income exceeds a specific amount, you may be eligible for a refund. For 2024, if your earned income exceeds $2,500, you may be eligible for up to 15% of your income above this threshold, up to a maximum of $1,700.

Income Limits and Reductions

While the Child Tax Credit provides substantial financial relief, it begins to phase out for higher-income families. The credit amount decreases by $50 for every $1,000 above the income limits:

• Married couples: Phases out at $400,000.
• Single or head of household: Phases out at $200,000.

These income reductions apply to both the CTC and the ACTC.

The Child Tax Credit and Additional Child Tax Credit can provide significant financial relief for families with children. By understanding the income thresholds, eligibility criteria, and how to claim these credits, you can receive up to $1,700 in refunds, even if your tax liability is reduced to zero.

Be sure to file your tax return accurately and apply for the Additional Child Tax Credit if eligible, as this can make a meaningful difference for your family.

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