New Child Tax Credit Could Be Coming to Louisiana – Should You Wait to File Your Taxes?

BATON ROUGE, La. (KPEL News) - Louisiana taxpayers, like so many across the country right now, are looking ahead to April and collecting their paperwork to file their taxes.

But recently, there has been some speculation online about whether or not people should delay filing their taxes while the federal government debates potential new Child Tax Credit rules that could determine how much you can claim.

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What's Going on With Tax Credits?

Congress has been working on a deal to expand child tax credits, and that deal would likely be retroactive to 2023 tax filings.

According to CBS News, the deal could get parents more money in tax refunds.

Here's how CBS broke down the (potential) CTC deal:

• The agreement would make it easier for more families to qualify for the child tax credit, as well as to get more money back in their annual tax refund.

• First, taxpayers could use their income from either the current or prior year in calculating the CTC, which is helpful if their income drops and they can't qualify for the tax credit. This would go into effect with the 2024 tax year.

• Second, the calculation to determine the CTC's refundable tax credit would be changed to help more poor families receive a modestly higher benefit. Currently, the calculation is based on multiplying a parent's income by 15%, which can limit the tax credit for poor families with more than one child. The new calculation would multiply the parent's income by 15% as well as by the family's number of children.

• A third tweak is linked to the partially refundable nature of the CTC, which provides up to $1,600 back in your annual tax refund if you don't owe taxes or you are getting a refund. Under the provision, the maximum refundable amount per child would rise to $1,800 in 2023, $1,900 in 2024 and $2,000 in 2025.

That could be a great deal for parents, many of whom have been struggling with inflation on top of the normal costs of parenthood. But the question is whether or not you could file your taxes based on the new credit - and if you should wait while Congress sorts it out.

But Should You Wait to File?

While you may be tempted to do so for the sake of getting more money back, some experts are warning against it.

"I can emphatically say, without a question, never wait to file your taxes for possible pending D.C. legislation," one told CBS MoneyWatch. "It's just not an equation that works."

According to that expert, if Congress passes a law that makes it retroactive to 2023, typically the IRS sends a check to taxpayers to make up the difference. Any "tweak" to the CTC may only affect your return by a couple hundred dollars - certainly not worth the potential fines that come from waiting too long to file.

In short, DO NOT DELAY FILING YOUR TAXES. It's not a good idea.