The federal government’s focus and approach to financial allocations and tax breaks, among other stimulus instruments employed throughout the nation’s history to provide impulses to the most vulnerable families, are changing as we enter a new period in America.
One program that may undergo changes when Donald Trump starts his second term in office is the Child Tax Credit (CTC).
The credit rose to $2,000 for each child under the age of 17 when the president signed the Tax Cuts and Jobs Act of 2017 (TCJA).
Unless Congress steps in, these protections will expire after 2025, which might have an effect on 2027 tax returns.
What could change in the CTC stimulus payment?
Both the CTC and the phaseout levels for higher-income families were raised by the TCJA in 2017. Although the goal of this policy was to offer more widespread relief, it also generated discussion about how to distribute benefits fairly.
This program is at risk since its future is uncertain and the provisions’ expiration date is drawing near. Lawmakers are worried about how the credit cut will affect families because it could result in a sharp decline.
For the time being, recipients who do not owe any taxes can still receive a refund because a portion of the CTC is refundable. The suggested modifications, which prioritize tax reduction for taxpayers, might, however, restrict this feature.
The Senate rejected the plan to increase access to the CTC and make retroactive payments for the 2023 refundable part, even though the House of Representatives had approved it.
How to claim the Child Tax Credit in 2024-2025
Those who have dependent children under the age of 17 are eligible for the child tax credit, which has a maximum of $2,000 per child. The child’s caregiver connection, income, and marital status all affect their eligibility for this benefit.
Because credit is progressively reduced depending on modified adjusted gross income (MAGI), high income may result in credit reduction or ineligibility.
The child tax credit’s maximum amount for 2024 is still $2,000, with a $1,700 refundable component. The MAGI levels are still $200,000 for other filers and $400,000 for married couples filing jointly. If these thresholds are exceeded, the credit is reduced by $50 for each $1,000 of increased income until it is removed.
The income criteria will not change, and the credit will be $2,000 in 2025 with a $1,700 refundable component. However, if no extension is granted, income criteria would return to their pre-2017 levels and the benefit will be lowered to $1,000 in 2026.
The child’s age, relationship, dependent status, residency, financial support, citizenship, and income requirements are among the seven requirements that must be fulfilled by an application in order to be eligible.
See Also: The Upcoming Supplemental Security Income Payments Will Arrive Early
Eliot Pierce is a dedicated writer for ChiefsFocus.com, covering local crime and finance news. With a keen eye for detail and a passion for storytelling, Eliot aims to provide his readers with clear and insightful analysis, helping them navigate the complexities of their financial lives while staying informed about important local events. His commitment to delivering accurate and engaging content makes him a valuable resource for the community.