The maximum Child Tax Credit per eligible child for 2023 is $2,000 for kids under 5 and $3,000 for kids from 6 to 17.
It is significant to note that the current tax season does not support the advance payment option offered in prior years.
Child Tax Credit Requirements
The Child Tax Credit is subject to a number of restrictions. First, you have to be a guardian or parent who filed taxes in 2023.
According to the IRS, your kid or dependant must have a Social Security number that is valid for employment in the US in order to be eligible. They have to be under the age of 17. The other needs are:
- They are your biological or legally adopted child; your stepchild or foster child; your brother or sister; or your half- or full-brother or half-sister (such as a niece, nephew, or grandchild).
- They cannot be expected to supply more than 50% of their own annual financial support.
- They’ve been with you for over six months!
- On your tax return, they qualify as a dependant.
- They don’t file a combined return for the tax year with their spouse or they do it solely to request a refund of income tax withheld or anticipated tax paid.
- They are American nationals, American citizens, or US residents alien.
If your adjusted gross income as a parent or guardian is less than $200,000 when filing singly or less than $400,000 if you’re filing a joint return with a spouse, you are eligible for the Child Tax Credit.
The US individual income tax return, or 1040 form, is where you identify your children and other dependents in order to be eligible for the Child Tax Credit. A schedule 8812 must also be completed for dependents who qualify, such as children.
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Child Tax Credit’s Lack Of Expansion
However, it is apparent that families with children have suffered as a result of the Child Tax Credit’s lack of expansion past 2021. But the high rates of child poverty aren’t just due to the absence of increased credit.
The percentage of children living in poverty fell to 5.2% in 2021, a significant decrease from 9.7% in 2020. And the Economic Policy Institute claims that the increased Child Tax Credit is the main factor (EPI). Without that improvement, it is simple to understand why so many kids have fallen back into poverty.
But we can equally blame minimum wages for the stagnant rate of child poverty, as well as the lack of growth in that sector. Even though the cost of living has increased significantly since 2009, the federal minimum wage of $7.25 has remained the same.
Currently, some states are moving to increase their own minimum salaries. However, a States Newsroom examination of wage and poverty data revealed that 16 of the 20 states that failed to do so have more than 12% of their children living in poverty.
In contrast, the EPI predicted that raising the federal minimum wage to $15 an hour in 2025 would lift up to 3.7 million Americans out of poverty, including 1.3 million children. This prediction was made in a report from 2021. However, there hasn’t been much development in that area so far.
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