Have you heard about the recent news claiming that the IRS will start issuing monthly payments of $300 for children under six and $250 for those aged six to seventeen starting in July 2024? This news has gone viral and caused widespread confusion. However, this information is false. This article aims to clarify the current regulations of the Child Tax Credit and address the inaccuracies in the viral news.
The False Claim What Really Happened
The confusion likely comes from a mix-up with the temporary Child Tax Credit changes from the American Rescue Plan Act of 2021. Back then, eligible families got monthly payments from July to December 2021. But those changes were temporary and no longer apply. These payments were meant for parents or guardians, not directly for children.
Understanding the Current Child Tax Credit (CTC)
- Credit Amount: Up to $2,000 per qualifying child.
- Age Limit: For children under 17 at the end of the tax year.
- Refundability: Part of the CTC is refundable if it exceeds the taxes owed, called the Additional Child Tax Credit (ACTC).
- ACTC Amount: Up to $1,400 per child can be refunded to families with little to no tax liability.
Eligibility Criteria
- Income Requirements: Full credit for single filers earning up to $200,000 and married couples filing jointly earning up to $400,000.
- Residency and Relationship: The child must live with the taxpayer for more than half the year and be related to them.
- Support: The child must not have paid for more than half of their own expenses.
2021 Temporary Changes vs. Current Rules
In 2021, under the American Rescue Plan, the CTC was temporarily increased to $3,600 for children under six and $3,000 for children aged six to seventeen, with monthly advance payments. These changes ended in 2021, and the current regulations have returned to the pre-2021 structure, which still provides significant support but is less generous than the temporary enhancements.
Future Proposals and Political Landscape
President Joe Biden has proposed bringing back the expanded CTC with monthly payments in his 2025 budget. However, this faces significant political hurdles, especially in the Republican-controlled House of Representatives.
Conclusion
The claim about new IRS child tax credit payments starting in July 2024 is false. Always check reliable sources and official announcements for accurate information on tax policies.