Although it was expected that the new expansion of the Child Tax Credit (CTC) would be approved before the start of the 2023 tax season, which is presented in 2024, this did not happen and is something that is currently being followed debating among American leaders. However, the chances of it becoming law remain high. In that case, Things would change for all American taxpayers with dependentsalthough there are specific groups that would have the greatest benefits.
The main objective of this plan is to make it easier for low-income American families to access the tax credit. It is also proposed that the quantities currently available be increased. This project is part of the $78 billion tax reduction law, which also proposes to provide, in exchange for the extension of the Child Tax Credit, greater incentives for American companies.
Currently, families can get a credit of up to $2,000 per child as long as they have children under 17 years of age. Taxpayers must also have annual income that does not exceed $200,000 if you file your taxes as head of household and $400,000 annually for those who file their taxes jointly.
A lower figure if we take into account the approvals that were made in favor of families with children due to the Covid-19 pandemic. During that economic crisis, the Internal Revenue Service (IRS) granted $3,600 for each qualifying child under six years of age, and $3,000 for families with children under 17 years of age.
Because the current CTC is partially refundable, families can receive up to $1,600 as a maximum refund. The bill seeks to increase this amount to $1,800 for income earned during 2022. For income in 2023, this amount would increase to $1,900 and for 2024, The credit would be $2,000 refundable dollars for each qualifying dependent.
According to estimates from the Institute on Taxation and Economic Policy, reported by the Sacramento Bee, those families that qualify for the new CTC and earn less than $27,700 could see an average increase in the tax credit by $1,040 for the following year.
According to the Center on Budget and Policy Priorities of the United States, information that was taken up by the Sacramento Bee, The following groups would benefit most from the new CTC:
- A single mother with a toddler and an elementary school child earning $24,000 annually would get a credit of $3,920, which is $400 more than the current level.
- A married couple with three children with income that does not exceed $32,000 per year. They would receive about $1,940 per child, a total of $5,830, which would represent an increase of $975.
- A single parent with two children, who earns $18,000 annually, would get a credit of $1,800 per child in the first year for each child, $1,275 more than current law.
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2024-02-28 21:50:23
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