$3,600 CTC Plus $1,400 Per Person Payment Coming This Week – American Rescue Plan Eligibility

The Child Tax Credit (CTC) has been a crucial financial aid for American families since its inception in 1997. Designed to alleviate the financial strain of raising children, it has undergone significant changes, especially in the wake of the American Rescue Plan. Let’s look into the latest updates on the $1,400/person plus $3,600 CTC payment and the eligibility criteria under the American Rescue Plan.

Recent Adjustments

Initially, the CTC offered $2,000 per child, with $1,400 being refundable. However, in 2021, the American Rescue Plan increased the CTC to $3,600 for children under six and $3,000 for children aged six to seventeen, making the entire credit refundable for that year. This significant enhancement was a temporary measure to support families during the pandemic and reverted in 2022.

For the fiscal year 2024/25, further adjustments are anticipated to account for inflation. Under the proposed Tax Relief for American Families and Workers Act of 2024, the maximum refundable credit will gradually increase, reaching $1,900 in 2024 and $2,000 in 2025.

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2024 Changes

In 2021, the American Rescue Plan dramatically increased the CTC, providing $3,600 for children under six and making the entire credit refundable. Looking ahead to 2024, the CTC is expected to see a modest increase to keep up with inflation. Reports indicate that the maximum refundable amount will rise to $1,900 in 2024 and $2,000 in 2025. This incremental adjustment ensures that households continue to receive adequate support to manage their expenses.

Eligibility

The American Rescue Plan lays out specific income thresholds for eligibility:

• Single individuals must earn less than $75,000.
• Joint filers must earn up to $150,000.
• Heads of households must earn less than $112,500.

Benefits Breakdown

The plan offers direct benefits to employed households:

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• Individuals without children can receive an income tax credit ranging from $543 to $1,502.
• For those with children, the CTC provides $2,000 to $3,000 for each child over six and $3,600 for children under six.
• The age limit for qualifying children was previously sixteen but has been increased to seventeen under the new rates.

Qualification Criteria

To qualify for the CTC, households must meet the following requirements:

• Each child must have a valid Social Security Number.
• Children must be under 17 years old before the end of the tax year.
• Children must have lived with the applicant for more than half the year.
• The child must be a U.S. citizen, national, or resident alien and must not have provided more than half of their own support.

Families who missed filing their taxes and signing up for monthly payments can still claim the CTC by filing a tax return, ensuring they receive the maximum benefits owed to them under the law.

Key Insights

The CTC is instrumental in providing financial relief to families, helping them cover the costs of raising children amid rising living expenses. Claiming the CTC requires filing a federal tax return using Form 1040 and attaching Schedule 8812. Households that filed taxes in 2019 or 2020 or received stimulus checks will automatically receive CTC payments without needing to sign up again.

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Importantly, the CTC does not affect other federal benefits like unemployment insurance or Medicaid, allowing families to receive multiple forms of assistance without any reduction. As the rules around the CTC evolve, staying informed about eligibility and application processes is crucial for families to maximize their benefits in the coming years.

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