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Additional Child Tax Credit (ACTC) 2024: how much is it, requirements, who qualifies and how to claim it to the IRS

Everything You Need to Know and How To Claim It the Additional Child Tax Credit (ACTC) 2024

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The Additional Child Tax Credit (ACTC) is a refundable tax credit designed to help families with qualifying children get a bigger tax break. It is a part of the Child Tax Credit (CTC), which provides a tax credit of up to $2,000 per qualifying child. The ACTC allows eligible families to claim a refundable credit of up to $1,600 per qualifying child. In this article, we will explore the requirements, qualifications, and how to claim the ACTC for 2024.

How Much is the Additional Child Tax Credit (ACTC) in 2024?

The ACTC is a refundable tax credit worth up to $1,600 per qualifying child. This means that if the credit exceeds the amount of taxes owed, the family can receive a refund for the difference. For example, if the family’s tax liability is $1,000 and their ACTC is $1,600, they can receive a refund of $600.

Requirements for the Additional Child Tax Credit (ACTC) in 2024

To qualify for the ACTC, families must meet the following requirements:

  • The child must be under 17 years old at the end of the tax year.
  • The child must be a son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of one of these (for example, a grandchild, niece or nephew).
  • The child must have a Social Security Number issued by the Social Security Administration before the due date of the tax return (including extensions).
  • The child must have lived with the family for more than half of the tax year.
  • The family must have provided more than half of the child’s financial support during the tax year.
  • The child must not have filed a joint return with their spouse for the tax year (or filed it only to claim a refund of withheld income tax or estimated tax paid).
  • The family must have earned income of at least $2,500 for the tax year.

Other Dependants Credit (ODC)

Other Dependants Credit (ODC) is a tax claim for eligible dependents who can’t be claimed for Child Tax Credit (CTC) or Additional Child Tax Credit (ACTC). To claim a dependent for ODC;

  • Know that:
    • This is a non-refundable tax credit of up to $500 per qualifying person.
    • The credit begins to decrease in value if your adjusted gross income exceeds $200,000 ($400,000 for married filing jointly).
  • To  qualify your dependent for ODC. The dependent must be:
    • A dependent claimed on your return.
    • A dependent who can’t be claimed for the CTC/ACTC.
    • A U.S. citizen, U.S. national, or U.S. resident alien.

Who Qualifies for the Additional Child Tax Credit (ACTC) in 2024?

The ACTC is designed for families with qualifying children who have a Social Security number. The following individuals can claim the ACTC:

  • Biological child, grandchild, niece or nephew, step-child, a child lawfully placed for legal adoption, adopted child, or a foster child.
  • The child could also be none of the above or not related – the family can still claim the credit as long as the child qualifies as their dependent.

A Step-by-Step Guide On Claiming Additional Child Tax Credit (ACTC) in 2024

The Additional Child Tax Credit (ACTC) is a refundable tax credit designed to help families with qualifying children receive a bigger tax break. If you’re eligible, claiming the ACTC can result in a significant refund. In this article, we’ll walk you through the steps to claim the ACTC in 2024.

Step 1: Determine Your Eligibility

Before claiming the ACTC, ensure you meet the eligibility criteria:

  • Have a qualifying child under 17 years old
  • Meet the income requirements (less than $200,000 for single filers and $400,000 for joint filers)
  • Have a Social Security Number for each qualifying child
  • Be a U.S. citizen or resident alien

Step 2: Gather Required Documents

Collect the necessary documents:

  • Social Security Numbers for yourself and your qualifying children
  • Birth certificates or adoption papers for your qualifying children
  • Form 1040 and Schedule 8812
  • Proof of income (W-2s, 1099s, etc.)

Step 3: Complete Form 1040 and Schedule 8812

Fill out Form 1040 and attach Schedule 8812:

  • Enter your qualifying children’s information on Schedule 8812
  • Calculate the total Child Tax Credit (CTC) and ACTC
  • Enter the credit amount on Form 1040

Step 4: Claim the ACTC

Claim the ACTC on Form 1040:

  • Enter the ACTC amount in the “Refundable Credits” section
  • Ensure you have enough tax liability to offset the credit

Step 5: Submit Your Return

File your tax return:

  • E-file or mail your return to the IRS or file for tax return in person
  • Keep a copy of your return and supporting documents

Step 6: Receive Your Refund

If you’re eligible,you will receive your refund via:

  • Direct deposit or paper check
  • Receive your refund within 6-8 weeks

Tips and Reminders

  • Families can use the Interactive Tax Assistant tool on the IRS website to check if they qualify for the ACTC.
  • The ACTC begins to decrease in value if the family’s gross income exceeds $200,000 ($400,000 for Married Filing Jointly).
  • Families can claim the ACTC even if they do not normally file a tax return.
  • The ACTC is not allowed if the family or their spouse (if filing a joint return) file a Form 2555 or Form 2555EZ (excluding foreign earned income).

To ensure you receive the correct amount of ACTC, make sure to:

  • Accurately report your qualifying children’s information, including their Social Security Numbers, dates of birth, and relationship to you.
  • Claim the Credit for Other Dependents (ODC) if you have dependents who do not qualify for the Child Tax Credit.
  • Keep records of your income, expenses, and other relevant documents to support your claim.
  • Consult a tax professional or the IRS if you have questions or need assistance.

The Aim of the Additional Child Tax Credit (ACTC)

The Additional Child Tax Credit (ACTC) is a valuable tax credit designed to help families with qualifying children get a bigger tax break. By understanding the requirements, qualifications, and how to claim the ACTC, families can receive a refundable credit of up to $1,600 per qualifying child. Remember to keep accurate records, provide supporting documentation, and seek assistance if needed. Don’t miss out on this opportunity to reduce your tax liability and receive a refund.

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