New Child Tax Credit: Amounts and how to calculate how much you will get
Congress is working on an expansion of the Child Tax Credit. Here are the possible future amounts and how to calculate how much you could be entitled to.
Congress has launched a bill to expand the Child Tax Credit (CTC) with the aim of providing greater economic assistance to low-income families. Families can currently claim a credit for $2,000, with a refundable maximum amount of $1,600 per child. However, that would increase if the Senate gives the green light to the measure.
New child tax credit: This is how the amounts would look
The bipartisan bill was approved at the end of January in the House of Representatives, so all that remains is the approval of the Senate for the increase in the CTC to be official. If approved, families could receive a greater amount of money over the next three years.
Under the proposal, the maximum reimbursable amount per child would increase gradually starting 2023, on to 2024 and 2025 until it reaches $2,000. With this scheme, the maximum refundable amount per child for fiscal year 2023 would remain at $1,800. In 2024 it would increase to $1,900 and in 2025, it would rise to the cap of $2,000. In the years 2024 and 2025, the figure would be adjusted according to inflation indices.
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How to calculate how much you would be entitled to
Currently, taxpayers can calculate the CTC by multiplying their earned income (greater than $2,500) by 15%. With the new law, the earned income (greater than $2,500) would be multiplied by 15%. Subsequently, the result would be multiplied by the number of qualifying children. According to experts on the subject, the Washington Post has the most accurate calculator.
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Requirements to qualify for Child Tax Credit.
The requirements for the expanded version of the Child Tax Credit would be quite similar to the current ones:
- The dependent must have been under 17 years of age on December 31, 2023
- The dependent must have a valid Social Security number
- The dependent must be a US citizen or resident alien
- The dependent must not have contributed more than half of his or her own support
- The dependent must have lived for more than half a year with the taxpayer