The House passed a bill last week to expand the Child Tax Credit 2024 scheme, providing much-needed relief for low-income families with dependent children. The federal tax benefit serves as financial aid for families with children under 17, potentially reducing tax bills. The bill, called The Tax Relief for American Families and Workers Act of 2024, would increase the credit amount for a refund under the Child Tax Credit, providing additional financial relief to qualifying families.
The expansion of the Child Tax Credit is designed to ease the financial burden on low-income families with dependent children. The credit currently stands at $2000 for each qualifying dependent under 17, with up to $1600 potentially being returned as a refund. If the bill is approved, the credit amount for a refund could increase to $1800 for 2023 tax returns, and rise further to $1900 and $2000 for 2024 and 2025 tax returns, respectively. In order to qualify for the credit, eligible children must have a valid social security number for employment in the US and households must have at least $2500 in income.
If the bill is approved by the Senate, the expansion of the Child Tax Credit will benefit low-income families the most, as well as enhancing tax credits for rental house constructions. The tax credit is estimated to result in a tax cut of $680 for households in 2023, with nearly 50% of households with income under $21,000 benefiting from the cut. Overall, over 16% of Americans would see a lower tax bill as a result of the expanded Child Tax Credit. This expansion seeks to provide much-needed financial relief to families struggling to make ends meet.
