Who can request the ACTC if you do not qualify for the Child Tax Credit in 2024?
Are you still finalizing your tax return? If you have children, find out if you qualify for the Additional Child Tax Credit to lower federal tax liability.
As the deadline to submit tax returns looms, filers are trying to find ways to lessen their tax liability. If you have children, you may be trying to determine if you can apply Child Tax Credit on your return. The CTC is intended to provide financial assistance to families with children and help reduce the tax burden for eligible taxpayers.
The CTC is subject to income limitations, and the amount of the credit gradually phases out for taxpayers with higher incomes. If you are unable to make total use of this benefit because the federal income tax you owe is less than your credit amount, you could try to avail of financial assistance through the Additional Child Tax Credit and claim a partial refund.
To qualify for the ACTC, you must meet the income and dependent criteria to receive CTC, with some additional requirements.
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Who can request the ACTC if you do not qualify for the Child Tax Credit in 2024?
The Additional Child Tax Credit is a refundable tax credit that is primarily based on the taxpayer’s earned income and is subject to different income limitations. Taxpayers must have earned income above $2,500 to qualify for the additional credit, or have three or more qualifying dependents.
Qualifying children must be under the age of 17 and must meet certain relationship, residency, and support tests.
The ACTC is calculated as 15% of the taxpayer’s earned income above $2,500, up to a maximum credit amount per qualifying child.
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If the amount of the credit exceeds the taxpayer’s federal income tax liability, they may be eligible to receive a refund for the excess amount, making the credit “refundable.”
The maximum refund you can expect to receive for fiscal year 2023 is $1,600 per qualifying dependent.
Eligibility for the credit and the amount of the credit can vary depending on individual circumstances, so it’s advisable for taxpayers to review the IRS guidelines and/or consult with a tax professional to determine eligibility and accurately claim the credit on their tax return.