Family Tax Credits for 2024

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Keeping up with new changes in taxes can be mind-boggling, so I’ve created an easy and concise overview of credits you and your family may be eligible for. I’ve outlined the current tax credit options, their updated values, and what you need to know to maximize your tax advantages. 

Let’s dive into what’s different this year!

Credits Vs Deduction

Credits directly reduce the taxes due or increase your refund. Some credits are refundable even if you do not owe taxes. Deductions lower your taxable income; therefore, reducing taxes owed. 

Here are some of what the IRS classifies as Family and Dependent Credits:

Child Tax Credit (CTC)

Eligibility:

  • Qualifying child must be under the age of 17.
  • Qualifying child must be claimed as your dependent on your tax return
  • You must provide for half or more of their financial support
  • The child lived with you for more than half the tax year
  • The child must be a U.S. citizen, U.S. National or a U.S. resident alien
  • The child has a social security number that is valid for employment and is issued prior to the date of your tax return
  • Qualifying child must not file a joint return with spouse for the tax year 

Credit Amount: 

  • $2,000 for each qualifying child

Phase Out:

  • Phase out of credit occurs when modified adjusted gross income (MAGI) exceeds $200,000 for individual ($400,00 for joint)
  • Additional Child Tax Credit has increased to $1,700.

Use the IRS interactive tax tool to see if you qualify 

Child and Dependent Care Credit (CDCC)

Eligibility:

  • You paid for the care of a qualifying individual so you or your spouse (if filing jointly) can work or seek employment.

Credit Amount: 

  • The amount of expenses to calculate the credit cannot exceed $3,000 for one qualifying individual or $6,000 for two or more. 
  • If you receive a deduction for dependent care, you must reduce that amount from your calculation.

Qualifying individual: 

  • The qualifying child was under 13 years old and your dependent
  • Your spouse who was physically or mentally unable to care for themselves and live with you for more than six months
  • An individual who was physically or mentally unable to care for themselves and live with you for more than six months and either:
    • was your dependent or 
    • qualifies as your dependent except their gross income was $5,050 or more or filed a joint return, or you (or your spouse, if filing jointly) could have been claimed as a dependent on another taxpayer’s 2024 return
  • Caution: children of divorced or separated parents or of parents living apart have different circumstances which may apply. See publication 503 for help

Use the IRS interactive tax tool to see if you qualify

Earned Income Tax Credit (EITC)

Eligibility:

  • You worked and your earned income was under $66,819
  • You have investment income is $11,600 or less
  • You have a valid Social Security number by the due date of  2024 return (including extensions)
  • You are a U.S. citizen or a resident alien all year
  • You did not file Form 2555, Foreign Earned Income
  • You meet certain rules if you are separated from your spouse and not filing a joint tax return

Credit Amount: 

  • No qualifying children $632
  • 1 qualifying child $4,213
  • 2 qualifying children $6,960
  • 3 or more qualifying children $7,830

Use the  IRS interactive tax tool to see if you qualify 

Adoption Credit

Eligibility:

  • You adopted an eligible child 
  • Under age 18
  • Physically or mentally incapable of self-care
  • For special needs, a child
    • Is a U.S. citizen
    • Cannot return to their parents’ home
    • Is unlikely to be adopted without assistance

Credit Amount: 

  • There is a credit and exclusion amount both based on MAGI. If you meet the requirements both the credit and exclusion will be $16,810 each. The exclusion must be taken first and then the credit.
  • Credits taken in a previous year will have to be deducted in the current year regardless of success of adoption.
  • The credit is for each adoption of a child, not each calendar year
    • Ex: In 2024, you claimed a $4,000 adoption credit last year and you paid $16,810 in expenses this year. Only 12,810 ($16,810 – $4,000) can be claimed.
  • The income exclusion is in addition to the credit, but you can’t claim both for the same expenses
    • Ex: in 2024, you paid $10,000 in qualified expenses, your employer reimbursed you for $4,000. You maximum credit would be $6,000 ($10,000 – $4,000)
  • The credit is nonrefundable which means it is capped at your tax liability.
  • If you have an excess of tax liability, it can be carried forward up to 5 years.

Qualifying Expenses: 

  • Adoption fees necessary to adopt the child
  • Fees related to court and attorneys
  • Travel expenses including hotel and meals
  • Other expenses related to the legal adoption of an eligible child  
  • Expenses you paid before an eligible child has been identified, such as a home study fee

Phase Out:

  • Phase out of credit occurs when MAGI is between $252,150 and $292,150. You are not eligible for the credit if MAGI is over $292,150.

Use the IRS interactive tax tool to see if you qualify

Mindful Reminder

Remember to relax and give yourself plenty of time to do your return, especially if you have opted to do it yourself. Be patient as learning tax laws can be challenging. Refer to the previous year’s return as a guide. Use a method to center yourself if you become agitated. Having a calm mind will help you absorb information a lot easier.

Free Tax Preparation Resources

New York City offers free tax prep services

  • In person help – sit with a volunteer who can help you
  • Drop off service – drop off your information and pick up your return later
  • Virtual tax prep – go online and someone will help you
  • Assisted self-prep – tax prep by yourself or someone will assist you 

Create and account with the IRS to access:

  • Tax records
  • Make or view payments
  • View or create payment plans
  • View your balance due
  • Request account transcript

Need to check your refund status?

Federal refund

  • Call: (800) 829-1040
  • Callers who deaf or hard of hearing
  • TTY/TDD:  (800) 829-4059

NY State refund

  • Call: (518) 457 5149
  • Dial 711 for NY Relay Service

Seeking Help

If you are depressed, anxious, or have panic attacks, find a health professional who can help you. 

Substance Abuse and Mental Health Services Administration (SAMHSA) National can provide free referrals. They are open 24/7, 365 days a year.

If you are experiencing suicidal thoughts, please contact 988 for help. The calls are free, confidential, and they are open 24/7 to help you navigate difficult emotions. 

Attend a Workshop

If you are interested in attending a live webinar on improving your relationship with money, please visit my events.

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