CHILD TAX CREDIT CHANGE FOR 2022?
How Will the Child Tax Credit Change For 2022?
One of the most talked-about tax credits in recent tax seasons, the Child Tax Credit is making a return to the world of tax preparation for the 2022 season — with a few changes. Initially designed to help provide a boost for families during the continuing pandemic, the Child Tax Credit returns once more, albeit with a reduced payout.
Last year, the IRS increased the potential payout of the Child Tax Credit to $3,600 per child, up from $2,000 the year prior. For your 2022 tax return, the potential return per dependent aged 16 or younger scales back down to the original $2,000.
In addition, while last year’s tax credit was fully refundable, the 2022 filing season version is only refundable up to $1,500. Previously, if your Child Tax Credit payout exceeded your tax liability last year, the IRS would send you the difference. This year, that difference is capped at $1,500.
Another added stipulation makes it slightly harder to qualify for this year’s Child Tax Credit — you must have earned at least $2,500 in income on your 2022 tax return.
However, the IRS has loosened the Child Tax Credit income eligibility thresholds. Last year, taxpayers needed a modified adjusted gross income threshold of $75,000 ($150,000 for joint filers) to qualify for the full payout. For the 2022 tax season, this figure has been increased to $100,000 ($200,000 for joint filers).
Finally, taxpayers can no longer expect to receive advance payments for the Child Tax Credit as this option is no longer available.
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