The Child Tax Credit (CTC) has been a vital source of financial support for families across the United States, especially during challenging economic times. However, recent social media claims about a new CTC initiative have led to confusion regarding what support families can expect in 2024. This article clarifies the current state of the CTC, dispels common myths, and highlights what families need to know moving forward.
Viral Claims About Monthly Payments
This Article Includes
On June 9, a Facebook post gained traction, claiming that starting in July 2024, families with children would receive monthly direct deposits of $300 for children under six years old and $250 for children aged six to 17. The post suggested that these payments would be made by the IRS on the 15th of each month, reminiscent of the advance payments provided during the COVID-19 pandemic under the American Rescue Plan. However, this information was misleading and based on outdated data.
What Happened to the Child Tax Credit?
The rumors surrounding a new Child Tax Credit stem from President Joe Biden’s proposed budget for 2025, which includes plans to reinstate the expanded CTC from 2021. This proposal would allow families to receive their tax credits through monthly payments once again. However, given the current political climate and the Republican-controlled House of Representatives, the likelihood of this proposal passing is slim.
In January 2024, the House of Representatives did pass a bill aimed at increasing the refundable child tax credit, but this initiative never advanced to a Senate vote. As a result, families should not expect the return of monthly payments for the CTC in 2024.
The Current Structure of the Child Tax Credit
As of 2024, the Child Tax Credit has reverted to its original form, which is a partially refundable tax credit. This means that families can reduce their tax liability to $0, but they will only receive a portion of any remaining credit as a refund. Importantly, families must claim the CTC when filing their annual tax return.
For the 2024 tax year, taxpayers with dependent children can claim a non-refundable tax credit of up to $2,000 per child, provided they meet the necessary eligibility criteria. Additionally, there is a refundable credit of up to $1,600 available as part of the additional child tax credit, which further helps families manage their financial obligations.
Conclusion
In summary, while the Child Tax Credit has been a critical support system for families, the misinformation circulating about new monthly payments for 2024 is unfounded. As it stands, families can expect to claim a non-refundable credit of up to $2,000 per child and a refundable credit of up to $1,600 when filing their taxes. Understanding the realities of the Child Tax Credit will help families better navigate their financial planning in the coming year.
