Enhanced Child Tax Credit 2022

The child tax credit is a refundable tax credit given to families and individuals with qualifying children under the age of 17. The credit amount was increased with the Tax Cuts and Jobs Act of 2017, along with other major tax changes. The Internal Revenue Service now allows taxpayers with qualifying children to claim up to $3,600 in child tax credit with as much as all of it being refundable. 

The rules for claiming the child tax credit have shifted a little bit. Considering that we expect plenty of tax changes in the near future as the Biden administration is working on them, families with qualifying children may get an additional boost, such as an increased refundable portion or further credits. We’ll keep you updated if there are any further changes to the child tax credit for the 2022 tax season. For the time being, here are the rules for claiming the child tax credit for both individuals and families.

Rules for the child tax credit in 2022

The rules for the child tax credit in the 2022 tax season are fairly simple. There are a series of eligibility requirements for both the taxpayer and the child. These rules are as follows.

Dependency: The child must be claimed as a dependent on the taxpayer’s tax return.

Support: The taxpayer must’ve provided more than half of the child’s financial support during the tax year.

Resident: The child must’ve lived with the taxpayer for at least half of the tax year. One site note: the time spend during summer schools, school camps, etc. is counted towards living with the taxpayer.

Citizenship: The child and you must be a US citizen, but for taxpayers filing a joint return, only one spouse needs to be a citizen.

Relationship: The child must be related to you, so you can claim the child tax credit for your brother, sister, cousin, etc. but he or she can be your adopted children, foster children, or stepchildren. 

Income thresholds for the child tax credit 2022

add table from here: https://www.cnet.com/personal-finance/if-you-make-under-400k-per-year-youre-probably-getting-a-child-tax-credit-check/

The more you make above the income threshold, the smaller the tax credit gets. Generally, most taxpayers with an adjusted gross income of less than $400,000 are eligible for the child tax credit. The enhanced child tax credit payments are either going to reduce your tax liability as a whole or you’ll get it added to your tax refund. Although you might not get the full amount, it’s best to mind your federal income tax withholdings or estimated tax payments to make sure you get the most out of the child tax credit. 

While it’s all fairly simple to understand, everyone’s situation is quite different. Here are the most commonly asked questions about the child tax credit. 

How does the new child tax credit work?

The new child tax credit works pretty much the same as the previous version of the credit, but with increased amounts. You get $3,600 for children under the age of 6 and $3,000 for children under the age of 18. So, you can claim the child tax credit for your 17-year old child. Plus, the credit is fully refundable.

Child tax credit what if I filed?

You’re eligible, but forgot to claim the child tax credit or didn’t know about it? You can amend your federal income tax return to get your child tax return. It’s unfortunately the only way you can get your credit. You have until three years from the original filing date to amend your tax return. Since the credit is now fully refundable, you can get up to $3,000 per child or $3,600 per child under the age of 6. 

When does the new, enhanced child tax credit start?

The new child tax credit will go into effect for the 2021 taxes. When you file your tax return in 2022, you will get to claim up to $3,600 in child tax credit. Although the child tax credit is not available at the moment, there are other tax provisions that may affect your 2020 tax return.

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