Personal Tax Changes That Took Effect in 2024
Child Tax Credit is up to $500 but not refundable. It is for dependents who do not meet the requirements for the Child Tax Credit, such as qualifying relatives or children over the age of 17.
Other Dependents Credit is up to $500 but not refundable. It is for dependents who do not meet the requirements for the Child Tax Credit, such as qualifying relatives or children over the age of 17.
Earned Income Tax Credit (EITC) is up to $7,830 for qualifying taxpayers who have three or more qualifying children. The maximum EITC amount is up to $632 for taxpayers without a qualifying child, $4,213 for taxpayers with one qualifying child, and $6,960 for those with two qualifying children.
Child and Dependent Care Assistance. It’s meant to cover a percentage of day care and similar costs for a child under 13, a spouse or parent unable to care for themselves, or another dependent so you can work. Generally, it's up to 35% of $3,000 of expenses for one dependent, for a maximum amount of $1,050, or $6,000 for two or more dependents, for a maximum amount of $2,100.
Electric Vehicle Credit. If you buy a new plug-in electric vehicle (EV) or fuel cell vehicle (FCV) in 2024 you may qualify for a clean vehicle tax credit up to $7,500. On certain previously owned EVs the credit is up to $4,000.
The credit is available to individuals and their businesses. To qualify, you must:
- Buy it for your own use, not for resale.
- Use it primarily in the U.S.
The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years. In 2024, the IRS expanded access to the tax benefit by allowing consumers to choose between claiming a nonrefundable credit on their tax returns to lower their tax liability or transferring the credit to the dealer to lower the price of the car at the point of sale.
Energy Efficient Home Improvement Credit is equal to 30% of the sum of amounts paid by the taxpayer for certain qualified expenditures, including (1) qualified energy efficiency improvements installed during the year, (2) residential energy property expenditures during the year, and (3) home energy audits during the year. The credit is allowed for qualifying property placed in service before January 1, 2033.
Federal Solar Tax Credit reduces your income tax in exchange for going solar. Homeowners and business owners who have purchased and installed solar photovoltaic (PV) energy generation systems before 2033 are eligible to claim a federal tax credit equal to 30% of the overall cost of the system’s components, installation and associated fees during the year of installation.
Required Minimum Distribution (RMD). You must start taking RMDs by April 1 of the year after you turn 73 or 75 for those born in 1960 or later. For example, if you turn 73 in 2024, you can delay your first RMD until April 1, 2025.
The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans is increased to $23,000, up from $22,500. The limit on annual contributions to an IRA increased to $7,000, up from $6,500. The IRA catch‑up contribution limit for individuals aged 50 and over remains $1,000 for 2024. There is no age limit on making regular contributions to traditional or ROTH IRAs. The amount you can contribute to a Roth IRA depends on your modified adjusted gross income (MAGI). In 2024, you can contribute the full amount if your MAGI is under $146,000 if you are single or under $230,000 if you are married filing jointly. If your MAGI is higher, you may be able to contribute a reduced amount. For example, if you are single, under 50, and your MAGI is $146,500, you can contribute half of the maximum amount, or $3,250.
The adjusted gross income (AGI) limit to qualify for the the Retirement Savings Contributions Savers Credit in 2024 is $38,250 for single filers and married individuals filing separately, $57,375 for heads of household, and $76,500 for married couples filing jointly. Also, an eligible individual should be 18 or older, not a full-time student, not claimed as a dependent on another person's tax return, and make contributions to a retirement plan or IRA. The maximum contribution amount that may qualify for the credit is $2,000 ($4,000 if married filing jointly), making the maximum credit $1,000 ($2,000 if married filing jointly).
Individuals can contribute up to $4,150 to their HSA accounts for 2024, and families can contribute up to $8,300. Catch-up contribution limits for taxpayers 55 and older remain unchanged at $1,000.
Premium Tax Credit is a refundable credit based on your income and the cost of your healthcare plan if you bought health insurance through the Health Insurance Marketplace.
The Annual Exclusion for Gifts is $18,000 per recipient for 2024. The annual amount that one may give to a spouse who is not a US citizen is up to $185,000 in 2024.
Student Loan Interest Deduction. The maximum student loan interest deduction is $2,500, but is phased out or reduced out if the taxpayer's modified adjusted gross income (MAGI) is between $80,000 and $95,000 ($165,000 and $195,000 if married filing jointly) for 2024.
American Opportunity Tax Credit amount is up to $2,500 per student for people with up to $90,000 income and up to $180,000 income for married filing jointly taxpayers.
Lifetime Learning Credit is $2,000, based on $10,000 in qualifying expenses.
Standard Deductions for 2024 tax year:
| Filing Status |
Standard Deduction for 2024 Tax Year |
Change from 2023 |
| Single |
$14,600 |
+$750 |
| Married filing jointly |
$29,200 |
+$1,500 |
| Head of household |
$21,900 |
+$1,100 |
| Married filing separately |
$14,600 |
+$750 |
DATA SOURCE: IRS.
People who are at least 65 years old or blind can claim an additional standard deduction of $1,950 in 2024. If both spouses are 65 or older and blind, the additional deduction amount is $1,550 per spouse.
If you can be claimed as a dependent on another person's tax return, your 2024 standard deduction is limited to the greater of $1,300 or your earned income plus $450 (the total can't be more than the basic standard deduction for your filing status).
Long-term capital gains rates are 0%, 15% or 20%, depending on taxable income and filing status. In 2024, the 0% rate applies for individual taxpayers with taxable income up to $47,025 on single returns, $63,000 for head-of-household, and $94,050 for joint returns. The 20% rate for 2024 starts at $518,900 for singles, $551,250 for heads of household and $583,75 for couples filing jointly. The 15% rate is for filers with taxable incomes between the 0% and 20% break points.
The 3.8% surtax on net investment and additional Medicare tax (0.9% tax) are not tied to inflation and remain at $250,000 for married filing joint taxpayers, $125,000 for married filing separate taxpayers and $200,000 for other taxpayers.
For tax year 2024, the top tax rate remains 37%. The other rates are:
| Tax Rate on Income |
Single |
Head of Household |
Married Filing Jointly |
Married Filing Separately |
| 10% |
$0 to $11,600 |
$0 to $16,550 |
$0 to $23,200 |
$0 to $11,600 |
| 12% |
$11,600 to $47,150 |
$16,550 to $63,100 |
$23,200 to $94,300 |
$11,600 to $47,150 |
| 22% |
$47,150 to $100,525 |
$63,100 to $100,500 |
$94,300 to $201,050 |
$47,150 to $100,525 |
| 24% |
$100,525 to $191,950 |
$100,500 to $191,950 |
$201,050 to $383,900 |
$100,525 to $191,950 |
| 32% |
$191,950 to $243,725 |
$191,950 to $243,700 |
$383,900 to $487,450 |
$191,950 to $243,725 |
| 35% |
$243,725 to $609,350 |
$243,700 to $609,350 |
$487,450 to $731,200 |
$243,725 to $365,600 |
| 37% |
Over $609,350 |
Over $609,350 |
Over $731,200 |
Over $365,600 |
DATA SOURCE: IRS.