Changes to the 2022 Child Tax Credit

During the 2021 tax year, the government offered parents expanded eligibility and higher credit amounts for the child tax credit. That credit was given as a result of the passing of as a result of the American Rescue Plan Act (ARPA) of 2021. The act was made by congress as an effort to assist families as they continued economic recovery from the Covid-19 pandemic.

The enhanced child tax credit was valid through the end of December 2021 which means that the limits and amounts will revert to the 2020 tax credit rules.

What Will be the Amount for the Tax Credit?

Through the 2021 Enhanced Child Tax Credit families were able to receive $3600 for children under 6 years of age and up to $3000 for children between ages 6 to 17. For 2022 the amount and limits will revert back to $2000 per child for any dependent 16 years of age and under.

Additionally, the enhanced child tax credit allowed for a qualifying taxpayer could be refunded the difference between the amount of taxes they owed and the amount of the credit. And, no minimum income was required to qualify for the tax credit.

For the upcoming 2022 tax year, the credit is refundable up to $1500 (an increase of $100 from 2020 due to inflation). It is also dependent on your income in that you must meet a minimum of $2500 to be eligible for the refund.

Also, it’s important to know that the income thresholds are higher to meet the qualifications. You can qualify if your modified adjusted gross income is below $200,000 for single filers and $400,000 for joint filers. For anyone making more than those adjusted gross incomes, the credit is reduced by $50 for each additional $1,000 earned.

Advanced Child Tax Credit Payments Have Ended  

Because the advanced payment of the child tax credit ended in December of 2021 those payments was not available for the year 2022. This simply means that to receive the tax credit you’ll file a claim for the credit on your 2022 tax return.

This information is not intended as legal or tax advice. Cowdery Tax and its representatives does not offer legal or tax advice. We offer services for business bookkeeping, payroll, tax payments, and personal tax filings. We share information that is publicly available. Tax laws may change with or without notice that may alter or change the information contained in this publication.