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1 1 (January 23, 2024)

handle is hein.crs/goveobs0001 and id is 1 raw text is: Congressional ~ 'a Research Service ~ ~nforning th2 I g J~tive deba e ~noe 9 4 How Would the Child Credit Be Calculated for 2023 Under H.R. 7024? January 23, 2024 H.R. 7024, ordered to be reported by the House Ways and Means committee on January 19, includes several provisions that would expand the child tax credit for low-income families by increasing the refundable portion of the credit. The refundable portion of the child credit is sometimes called the additional child tax credit or ACTC. These changes include the following: 1. The ACTC would be calculated per child: After the ACTC amount is calculated under current law (15% of earned income above $2,500), it would then be multiplied by the number of children, effectively phasing in the credit faster for families with more children (i.e., a 30% phase-in rate for two children), capped by the maximum ACTC (see below). 2. The maximum amount of the ACTC would increase: The ACTC maximum would rise from $1,600 to $1,800 per child in 2023 and from $1,700 to $1,900 per child in 2024 and equal $2,000 (adjusted for inflation) in 2025. 3. Taxpayers could use prior-year earned income to calculate the ACTC: Taxpayers could calculate the ACTC using their prior-year earned income if their current-year earned income was less than their prior-year earned income. This would apply for 2024 and 2025. Hence, in 2024, a taxpayer could elect to use their earned income for 2023 to calculate their ACTC if that amount was more than their 2024 earned income (under current law, they could only use their 2024 earned income for this calculation). Congressional Research Service https://crsreports.congress.gov IN12306 CRS INSIGHT Prepared for Members and Committees of Congress - 91` Nf i.

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