Stimulus 2024: IRS Commits To Sending Child Tax Credit Refunds ‘Promptly’ — What To Know
IRS Commissioner Danny Werfel told a recent congressional hearing that his agency would be able to quickly implement changes to the child tax credit, if they are approved, and then send out tax refunds promptly — something that could give qualified U.S. taxpayers an extra couple of hundred dollars this tax season.
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The changes are part of an expanded child tax credit included in the Tax Relief for American Families and Workers Act, which the U.S. House passed in January, Accounting Today reported. However, the $78 billion bill has been stalled in the Senate.
During a hearing last month before the House Ways and Means Committee, Werfel was asked by committee chairman Jason Smith (R-Mo.) how quickly the IRS could make adjustments should the deal make it through Congress and get signed into law by President Joe Biden.
“We gave you a range of six to 12 weeks required for implementation from the point of enactment,” Werfel responded. “The reason we give a range is because we need to see the final language. But I’m committed to work diligently to make sure we’re closer to the six-week end of that range than the 12-week… It will be a top priority to make sure that this gets done.”
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CTC Scaled Back, But Could See Revisions
As Accounting Today noted, the latest version of the CTC has been scaled back from the version included in the American Rescue Plan Act of 2021, and some senators would like to see further changes. Even so, the expanded credit under the Tax Relief for American Families and Workers Act does hold several advantages for families that qualify.
Here are some of the changes, according to the House.gov website:
Under current law, the maximum refundable CTC for a taxpayer is computed by multiplying that taxpayer’s earned income (in excess of $2,500) by 15%. The new provisions modify the calculation by having taxpayers first multiply their earned income (in excess of $2,500) by 15% and then multiply that amount by the number of qualifying children. This policy would be effective for tax years 2023, 2024 and 2025.
Currently, the maximum refundable CTC is limited to $1,600 per child for 2023. The new provisions increase the maximum refundable amount per child to $1,800 in tax year 2023, $1,900 in tax year 2024 and $2,000 in tax year 2025.
For tax years 2024 and 2025, taxpayers can use their earned income from the prior taxable year in calculating their maximum CTC if the taxpayer’s earned income in the current taxable year was less than the taxpayer’s earned income in the prior taxable year.
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This article originally appeared on GOBankingRates.com: Stimulus 2024: IRS Commits To Sending Child Tax Credit Refunds ‘Promptly’ — What To Know
