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2025 Tax Filing Season Changes
As we dive into the 2025 tax filing season, the IRS wants to remind everyone to get prepared and stay informed about some important changes that could impact your 2024 tax returns.
Updates to Additional Child Tax Credit for tax year 2024
- The maximum additional child tax credit is now $1,700 per qualifying child.
- Bona fide residents of Puerto Rico can claim the additional child tax credit with one or more qualifying children.
- Refunds claiming the additional child tax credit will be issued after mid-February 2025.
Other changes for tax year 2024
- Standard deduction increase:
- Single/married filing separately: $14,600
- Head of household: $21,900
- Married filing jointly/qualifying surviving spouse: $29,200
- Child Tax Credit enhancements:
- Initial child tax credit amount is $2,000 per qualifying child.
- Phase out starts at AGI over $200,000 ($400,000 for joint returns).
- Qualifying child must be under 17 at the end of 2024.
- Earned Income Tax Credit:
- Claim without a qualifying child if aged between 25 and 65.
- Adoption Credit:
- Both credit and exclusion are $16,810 per eligible child.
- Phases out starting at modified AGI of $252,150; completely phased out at $292,150.
- Clean Vehicle Credit:
- Reported on Form 8936 and Schedule 3 (Form 1040), line 6f.
- Previously owned Clean Vehicle Credit:
- Available for vehicles acquired and placed in service after 2022.
More details can be found in Publication 17.
IRA Contribution Limit
- Increased to $7,000 ($8,000 for age 50+) from $6,500 ($7,500 for age 50+).
1099-K Reporting Requirements
- TPSOs must report transactions exceeding $5,000 in total payments for 2024. See Notice 2024-85 for transition relief details.
HCTT 2014-08. Small Business Health Care Tax Credit
The Small Business Health Care Tax Credit helps small businesses and tax-exempt organizations pay for health care coverage they offer their employees.
A small employer is eligible for the credit if it has fewer than 25 employees who work full-time, or a combination of full-time and part-time. For example, two half-time employees equal one employee for purposes of the credit.
For 2013, the average annual wages of employees must be less than $50,000, and the employer must pay a uniform percentage for all employees that is equal to at least 50% of the premium cost of the insurance coverage.
The maximum credit is 35 percent of premiums paid for small business employers and 25 percent of premiums paid for small tax-exempt employers such as charities.
If you are a small business employer who did not owe tax during the year, you can carry the credit back or forward to other tax years.
For small tax-exempt employers, the credit is refundable, so even if you have no taxable income, you may be eligible to receive the credit as a refund so long as it does not exceed your income tax withholding and Medicare tax liability.
More information
Find out more about the small business health care tax credit at IRS.gov/aca.
The Small Business Health Care Tax Credit Estimator can help you find out whether you’re eligible for the Small Business Health Care Credit and how much you might receive.
Find out more about the health care law at HealthCare.gov.
Stacie's Tax Stuff 