Some taxpayers hoping to get the Child Tax Credit may be unsure if they should wait to file their taxes in case the revised law is passed in time to apply for this year. A revised version of the credit is presently working its way through Congress.
The general opinion is to submit your taxes as soon as possible, mostly to guarantee that you will receive a refund sooner.
Nevertheless, some families may want to postpone completing their forms to monitor any developments regarding the recently approved enhancement of the Child Tax Credit by the House of Representatives.
If the plan clears the Senate soon enough, the tax credit would be increased by $33 billion over 3 years, such as in 2024. It could additionally boost the number of lower-income families eligible for credit and increase credit for many households overall.
For instance, if your child is 16 years old or younger and your family income is less than $200,000 (or $400,000 for couples), you are eligible for a tax credit of $2,000 for each child within the current rules.
But when you submit your taxes, only $1,600 of the sum is refundable, so even if you have no outstanding debt to the government, that is the maximum amount of money you may receive back.
The new law would raise the limit to $1,800, with yearly increases of $100 throughout 2025. In 2024, it would therefore be $1,900, and in 2025, $2,000. It might be linked to inflation as well.
Still, it’s unclear whether or not the bill will even get to the Senate, let alone whether it will pass. The New Hampshire Bulletin reports that several Republicans worry that the extension would lessen work incentives.
The majority of experts advise you to submit your taxes as soon as possible because there is now no deadline for a Senate committee to even consider the measure.