As families look ahead to 2024, understanding the available tax credits can make a significant difference in both estate planning and financial planning. The Child Tax Credit, a key component of family tax strategies, is set to continue providing substantial support. In our blog, we want to delve into the details of the Child Tax Credit for 2024, highlighting eligibility, updates, and related tax credits like the Earned Income Tax Credit (EITC). 

We encourage you to ask us any of your questions related to this taxation and want to help you understand the Child Tax Credit. It is a federal benefit that reduces the tax burden on families, helping to offset the cost of raising children. It is both a way to reduce taxes owed and potentially receive a refund. For the 2023 tax year, the credit is worth up to $2,000 per qualifying child, with $1,600 refundable. In 2024, the refundable portion is expected to increase to $1,700, potentially putting an extra $100 per qualifying child back into eligible taxpayers’ pockets. These amounts are contingent upon Congress not making additional changes.

It should be noted that the IRS has strict guidelines for which dependents count as qualifying children. Typically, this includes:

  • Age, 
  • Relationship, 
  • Support, 
  • Dependent status, and 
  • Residency requirements. 

Ensuring your dependent meets these criteria is essential for claiming the credit. Claiming this credit involves providing accurate information about your dependents and income when filing your tax return. 

Alongside the Child Tax Credit, the Earned Income Tax Credit (EITC) is a significant benefit for individuals and families with lower to moderate incomes. This refundable credit is designed to supplement wages and incentivize work. For 2024, the EITC amounts have increased, offering up to $7,830 with three qualifying children, $6,960 with two, $4,213 with one, and $632 with no qualifying children. To claim the EITC, you must have earned income and meet certain income thresholds.

It is important for you to know that understanding and applying for the correct credits can provide substantial financial relief. As 2024 approaches, preparing for and understanding changes to tax credits like the Child Tax Credit and the Earned Income Tax Credit is vital. These credits can significantly impact your financial well-being and tax strategy. Tax planning is complex but crucial, it is also a key component of your Florida estate planning. By staying informed, ensuring eligibility, and potentially consulting with both your Florida estate planning attorney and tax professionals, you can navigate the tax year with confidence and maximize the benefits available to your family.

We know this article may raise more questions than it answers. At Perlin Estate Planning & Probate our credentials enable us to provide a multi-disciplinary approach to our legal services.  By building relationships with our clients, we are also able to understand each client’s needs and desires, and we support such goals through thoughtful, comprehensive planning techniques. We encourage you to contact us and schedule a meeting.