Accounting & Tax Tips
March 22, 2024

Impact of Enhanced Child Tax Credit on Tax Filing Season

This tax season, an interesting twist has emerged that could shape your tax filings: a proposed enhanced Child Tax Credit (CTC) under the $7.8 billion Tax Relief for American Families and Workers Act.

A More Generous Child Tax Credit

The revised CTC passed by the House in January 2024 promises a more generous form of the credit. Under the existing law, the tax refundable credit is $1,600 per child for 2023. If the new enhancement is approved, the maximum refundable amount per child could rise to $1,800 in 2023, $1,900 in 2024, and $2,000 by 2025.

Despite still being under the Senate’s review, advocacy groups welcome the amendment, citing its potential relief to millions of hard-working families across the country still struggling to combat inflation. 

Potential CTC Impacts and Adjustments

You may be wondering if you should hold off filing your tax return until the legislation is signed into law or, if you’ve already filed, how this may impact your return. 

The IRS released a statement in February suggesting they will “automatically make adjustments for those who have already filed so those eligible taxpayers will need no additional action.”

Thanks to improvements made by the Inflation Reduction Act, the IRS can automatically send additional refunds.

Follow This Post for Updates

While the full details of these changes have yet to get the final nod from the Senate, the IRS states that it is fully prepared to promptly implement these late-breaking CTC changes in refunds. 

Considering the millions of people this may impact, we are keeping a close eye on the development and are ready to help you navigate any changes to your child tax credit.

Continue following this post for more updates!  

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