On March 9, 2024, President Joe Biden proposed a new budget for the 2024 fiscal year, which includes various measures aimed at supporting American families.
One of the most notable proposals is an increase in the Child Tax Credit (CTC) from $2,000 to $3,600 per child under six years of age.
The proposed $3,600 is not a stimulus check but an enhancement of the existing Child Tax Credit. Under the current tax law, the CTC provides up to $2,000 per child under 17.
The proposed increase aims to provide additional support to families with young children, recognizing the significant costs associated with raising children.
If approved, the increase to $3,600 would apply to children under six, while the credit for children aged 6 to 17 would be $3,000. This adjustment is part of a broader budget proposal designed to reduce costs for working families, including healthcare, housing, and childcare.
1. Age of the Child: To qualify for the proposed $3,600 credit, the child must be under six years old by the end of the tax year. For children aged 6 to 17, the credit would be $3,000 if the proposal is approved.
2. Residency Requirements: The child must live with the taxpayer for more than half of the year. Exceptions apply for temporary absences or situations such as military deployment.
3. Dependency Status: The child must be claimed as a dependent on the taxpayer’s tax return. A qualifying child can include biological children, stepchildren, foster children, siblings, and other relatives under specific conditions.
4. Income Limits: The full credit amount is subject to phase-out based on the taxpayer’s adjusted gross income (AGI). For single filers, the phase-out begins at an AGI of $200,000, and for joint filers, it starts at $400,000.
1. File a Tax Return: File Form 1040 and attach Schedule 8812 to claim the credit. 2. Use IRS Tools: The IRS provides interactive tools to help taxpayers determine eligibility for the CTC and other credits.
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