Parents will still be able to claim the Child Tax Credit on their tax filings, but there are some important changes to be aware of.
Last year, the American Rescue Plan significantly enhanced the federal Child Tax Credit, giving parents hundreds of dollars more for each qualified child.
Who Is Eligible For This Year’s Child Tax Credit?
It also extended the eligibility age for dependents, implemented advance monthly payments, and permitted families who paid little or no federal income tax to receive funds.
However, those enhancements have since expired, and the Child Tax Credit requirements and benefits have essentially returned to pre-pandemic levels.
On December 31, 2022, the maximum tax credit given per child will revert to its pre-expansion amount of $2,000 for each kid under the age of 17. To be eligible for the tax reduction in 2022, you and your family must meet the following criteria:
- You make $200,000 or less in modified adjusted gross income, or $400,000 or less if you file jointly.
- The child for whom you are claiming credit was under the age of 17 on December 31, 2022.
- They have a Social Security number that is legitimate.
- They are your legally recognized kid, stepchild, foster child, sibling, half-brother or half-sister, or a descendant of any of these (like a grandchild or niece or nephew).
- In the relevant tax year, they supplied no more than half of their own financial support.
- They’ve been with you for more than half a year.
- You claim them on your tax return as a dependent.
- You are a US citizen or a permanent resident.
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How To Claim Payment?
You can claim the Child Tax Credit by completing Schedule 8812, Credits for Qualified Children and Other Dependents, and attaching it to your Form 1040.
You may still be eligible for the extra Child Tax Credit, which provides a refund of up to $1,500 per child. Fill out the worksheet for IRS Form 8812 to discover if you qualify for the additional Child Tax Credit.
You may be eligible for the child and dependent care credit if you paid for childcare. You can deduct 20% to 35% of your daycare expenses, depending on your circumstances.
The highest you can claim is $3,000 for one child under 13 or a dependent with impairments, or $6,000 for two or more. To qualify for this credit, you must have some earned income and the care cannot have been supplied by a spouse or family member.
According to the National Conference of State Legislatures, a dozen states have some type of tax credit that assists families: California, Colorado, Connecticut, Idaho, Maine, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oklahoma, and Vermont. And many more are thinking about taking advantage of the tax relief.
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