Child Tax Credit Changes

The Child Tax Credit, without a doubt, is one of the most commonly used tax credits. Whether you’re a family or an individual, you can claim the child tax credit as long as you have a qualifying child. The Internal Revenue Service has some changes for the child tax credit up ahead that every taxpayer that qualifies for it should know. In this article, we’ll go over the current changes to the child tax credit.

Increased child tax credit for 2021 taxes and beyond

The child tax credit is increased to a level where it’s satisfying for most families and individuals. For children under the age of 6, you get up to $3,600 and $3,000 for children under the age of 18. Previously, the child tax credit for the 2021 tax season granted $2,000 per child regardless of the age. This boost in the amount is a big relief in many taxpayer’s tax bill. Keep in mind that the above amounts are per child.

Child tax credit is now fully refundable

Prior to the changes in child tax credit, $1,400 out of $2,000 was refundable. With the new changes, the child tax credit is now fully refundable. This change can add $3,000 to $3,600 to your tax refund. In particular, this change is a good one because you get the full benefit of the credit and that $600 difference doesn’t get lost. 

Age rule changed

As mentioned above, the age rule has changed. Prior to the changes, you could claim the credit for only children under the age of 17 – that meet other rules. The age limit has been increased to under 18. So, your child can be 17 years, 11 months, and 29 days old at the end of the tax year and still qualify for the child tax credit as long as other conditions are met. This change basically grants one extra year per child that you’ll appreciate a lot.

Claiming the new child tax credit 2022

You don’t need to fill out any extra tax forms to claim the new child tax credit on your federal income tax return. While we can’t point out here is which line you’ll enter the child tax credit amount but regardless of where, you’ll need to enter dependent information on 1040. You will need to enter the following about your dependent(s).

  • Full Name
  • Social Security Number
  • Relationship to you
  • Eligibility for the child tax credit qualification – yes or no
  • Eligibility for the credit for other dependents – yes or no

Since you’ll state whether the dependent (child) qualifies for the new child tax credit or not, you can easily calculate the amount of child tax credit you deserve and enter it in the appropriate box. 

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