Child tax credit

In order to get the refundable part of the child tax credit you have to have at least $2500 of income earned from working, but to get the full refundable amount you need a lot more income from working.   Here is how it works:

The child tax credit is a credit of UP to $2000, but not everyone gets the full amount.  First the credit is applied to any tax you owe.  Then the "refundable" amount of up to  $1600  ($1750 for 2024)  is calculated.  Look at box 1 of your W-2.  Subtract $2500 from that.  Then take that number and multiply by 15%.  That is your refundable amount --or "additional child tax credit" amount.   If you did not earn at least $2500 you cannot get any additional child tax credit at all.

Good afternoon, mmorondo!

 Thank you for joining us!

Yes, you do need to make a minimum amount of income to qualify for the Child Tax Credit.

You must have earned income of at least $2,500 to be eligible for the Child Tax Credit (CTC) refund in 2022 and 2023. This changed significantly from the temporary provisions that were put in place for the  2021 child tax credit.  In 2021, you could get upto a $3600 child tax credit,  for children under 6, and  $3000 for a child between 6 and 17, even if you had no income or did not work.  

Yhe maximum allowed amount of child tax credit for 2023, was $2000 per child; the refundable portion or the “additional child tax credit” amount is $1600.   The refundabl amount of credit is calculated by multiplying the amount of income  earned above $2500,  by 15%, and is potentially refundable, up to the full $1600 per child. 

Also, you should be aware that there are currently  several provisions being considered currently by the  U.S. Congress, and that there may be some changes  to the Child Tax Credit rules and qualifications, for 2024. 

 For additional information, please see:

• 2023 and 2024 Child Tax Credit 
• Child Tax Credit Benefits for Eligible Parents 

Please feel free to reach backout with any additional questions or concerns you might have!

Have a great rest of your day!

Terri Lynn, EA

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