The expanded federal child tax credit bill is now close to becoming law. If approved, the new bill would significantly increase the child tax credit for lower-income families. You can easily calculate your child tax credit amount using calculators available online. To use the calculators, you need to enter your filing status, annual income and number of children.
Expanded child tax credit: will it become law?
Last week, the House approved the expanded child tax credit bill, the Tax Relief for American Families and Workers Act of 2024. The bill extends some business tax credits as well.
Attempts were made to re-expand the child tax credit after the expiration of the expanded Child Tax Credit two years ago. The expanded child tax credit, part of the American Rescue Plan Act 2021, boosted the credit amount to up to $3,600 per child, compared to $2,000 currently.
Realizing the importance of the expanded credit in lifting millions of children out of poverty, several attempts were made to revive the expanded credit, but only now gained enough support.
The new bill was approved with bipartisan support in the House and is now in the Senate for a vote. According to CNBC, Senate majority leader Chuck Schumer said that he supports the bill and is working to “figure out the best way forward.”
Despite the bipartisan support in the House, the bill could face challenges in the Senate. Some Senate Republicans have raised concerns over the cost of the bill. Many also believe that the expanded child tax credit won’t be enough to support low-income Americans.
How to calculate your child tax credit amount
Whether or not the expanded child tax credit becomes law is something we don’t know now, but we do know that it could significantly boost the child tax credit for low-income families, especially those with multiple children.
One easy way to calculate your child tax credit amount under the new bill is to use The Washington Post’s online calculator.
Currently, the credit amount phases in for lower-income families at the same rate, irrespective of the number of children they have. For instance, a couple with an annual income of $12,500 is eligible for a $1,500 credit, whether they have one or more children.
The new proposal, however, offers a credit per child. This means that a couple with an annual income of $12,500 would be eligible for $1,500 in child tax credits if they had one child, $3,000 if they had two children, and $4,500 if they had three children.
Also, under the new proposal, a family can receive some of the credit as a refund if their child tax credit is more than their income tax bill. Currently, a family can get up to $1,600 as a refund, but under the new proposal, a family can receive up to $1,800 in refund.