The Child Tax Credit has been a big help for millions of families qualified to receive this federal aid, but many were asking if this will be extended until 2025.
Will the Child Tax Credit be extended until 2025? (Photo:Forbes)
Child Tax Credit
The U.S. federal government and other states in the country are providing Child Tax Credit (CTC). This aims to help families with qualified children combat poverty and provide for their basic needs. This has become more significant during the pandemic.
The Child Tax Credit started in 1997 started after it received bipartisan support. It is part of the Taxpayer Relief Act and initially, the tax credit gave $400 per child under the age of 17 and it was non-refundable for the majority of American families.
Meanwhile, the amount was raised after the Tax Cuts and Jobs Act of 2017. It was raised to $2,000 and the U.S. government set a cap of $1,400 per child. Following it, it also introduced phase-out rates and criteria for higher-income taxpayers.
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Child Tax Credit in 2025
The Child Tax Credit was temporarily increased through the American Rescue Plan Act of 2021 (ARPA). This was initiated during the wake of the pandemic and the amount was increased from $2,000 to $3,600 per child under the age six of and $3,000 per child up to the age of 17, according to an article published in MARCA.
On the other hand, for single tax filers who are earning more than $75,000 and married couples earning more than $150,000 annually, their benefit gradually decreased.
Furthermore, it should be noted that the individual tax and estate tax provisions of the Tax Cuts and Jobs Act will expire in 2025.
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