The Child Tax Credit (CTC) and the Refundable Child Tax Credit (RCTC) can help up to 48 million low-income Americans with children. If you use both of these tax breaks, you can save almost twice as much money.
They both give money to help families with kids, but they do so in different ways that help taxpayers, especially those with less money.
What makes the CTC and RCTC different
The Child Tax Credit is a tax break for people who look after children younger than 17 years old. People who get the credit should have their tax bills go down.
Between 2024 and 2025, the child tax credit is worth $2,000 for each eligible child living with a qualifying family. The CTC can only lower the amount of taxes that are due since it can’t be given back.
This is a big difference between the RCTC and the CTC. When your tax bill is less than the credit, you don’t get a return. This means you lose the rest of the credit.
As a worker, you can get back some of the Child Tax Credit, which used to be known as the Additional Child Tax Credit. This is called the Refundable Child Tax Credit.
The CTC payment cannot be returned, but this payment can. For the fiscal year 2024–2025, $1,700 of the $2,000 from the CTC can be returned.
Let us use the example of a family who pays $1,500 in taxes to show this. The $1,500 part of the credit that they can’t get back will lower their tax bill to $0. The $2,000 CTC would still leave $500 over, though.
Since they can’t get their CTC back, they will lose this $500. The family could get the money back if they qualified for the Refundable Child Tax Credit (RCTC) portion (up to $1,700) and don’t owe any taxes.
They can get back part of the credit that is more than their tax bill with the Refundable Child Tax Credit.
How to get your CTC
If all of these things are true, you and your child can get the CTC. You can put it on your tax return for 2025 for the year 2024. The CTC is a big way for the government to help low- and middle-income families. It gives families a lot of help.
Early birds should get their CTC and TCTC by the middle of February 2019. Not only does the federal government give the CTC and RCTC, but your state may also have its child tax credits.
If you want to get correct information about tax credits, you should only get it from the government.
