In a move that promises to bolster the finances of qualified American families, IRS Commissioner Danny Werfel has assured swift implementation and disbursement of child tax credit refunds, potentially delivering an extra few hundred dollars to taxpayers this season. This commitment was voiced during a recent congressional hearing, signaling a rapid response to legislative changes.
The focus of Werfel’s pledge is the expanded child tax credit proposed in the Tax Relief for American Families and Workers Act, passed by the U.S. House in January but currently delayed in the Senate. Despite this hold-up, the IRS is preparing to act swiftly once the bill receives approval, aiming to minimize the time between enactment and the payout of refunds.
Werfel indicated a six to 12-week window for implementing changes post-enactment, stressing a goal to lean towards the shorter end of this timeframe. This readiness underscores the IRS’s dedication to supporting American families promptly.
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Key enhancements of the child tax credit under the new act include a revised calculation method that could increase the refundable amount per child for the tax years 2023 to 2025. Specifically, the legislation proposes raising the maximum refundable credit to $1,800 for 2023, $1,900 for 2024, and $2,000 for 2025, up from the current $1,600 per child.
Additionally, for the tax years 2024 and 2025, the bill allows taxpayers to base their child tax credit on the previous year’s earned income if it was higher, providing a potential financial cushion for families experiencing income fluctuations.
As families across the U.S. await the Senate’s decision, the IRS’s proactive stance offers a glimmer of hope for timely financial relief through enhanced child tax credits.
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