What to Expect in 2024: Will the $300 Child Tax Credit Direct Deposit Continue?

According to Marca, A Facebook post on June 9 generated significant buzz on social media, claiming that families with children would start receiving monthly direct deposits as part of the Child Tax Credit (CTC) beginning in July 2024. The post stated, “In 2024, the IRS will make a $300 direct deposit payment on the 15th of each month to children under six years of age. Those aged six to 17 will receive $250 each month.” It further asserted that these payments would begin on July 15, 2024, for all eligible individuals.

Misinterpretation of Data

However, this claim was based on a misunderstanding of the information, as it misused data from the American Rescue Plan. This program provided advance payments of the Child Tax Credit to parents, not directly to children, from July to December 2021, as part of the Covid-19 pandemic support initiatives. After this period, there was no expectation for the program to continue in the same manner.

What’s Happening with the Child Tax Credit in 2024?

Rumors regarding new support for families began circulating recently due to President Joe Biden’s proposed budget for 2025, which includes resources aimed at reinstating the expanded Child Tax Credit from 2021. This proposal suggests allowing families to receive their tax credits through monthly payments again. However, it is unlikely to pass in the Republican-controlled House, especially with upcoming elections.

Previous Legislative Efforts

In January, the House of Representatives passed a bill to increase the refundable child tax credit, but this initiative never reached a vote in the Senate. The proposed structure resembled the 2021 CTC with advance payments. Nevertheless, for 2024, the Child Tax Credit has reverted to its original form as a partially refundable tax credit.

Also read: 2025 COLA Increase: New SSI Payment Dates, Eligibility, and Amounts Explained

Current CTC Structure

Under the current guidelines, taxpayers with dependent children can claim a non-refundable tax credit of up to $2,000 for each qualifying child, as long as they meet the program’s requirements. This credit helps reduce their overall tax liability. Additionally, there is a refundable credit of up to $1,600 per child available through the additional Child Tax Credit.

Filing for the CTC

In 2024, taxpayers will need to claim the Child Tax Credit when filing their annual tax returns. If a taxpayer’s tax liability is already $0, they could receive up to $1,700 per qualifying child as a refund.

Conclusion

While the social media post regarding direct payments was misleading, there are ongoing discussions about the future of the Child Tax Credit. Families should stay informed about any developments, particularly regarding potential changes in 2025 and beyond.