Many families got up to $3,600 in the form of a child tax credit for the 2021 tax year because of the COVID-19 relief legislation. Now, we are in 2023, and there is no new COVID-19 relief legislation that could provide families with the same amount of money. Still, families could get up to $2,000 in the form of a child tax credit in 2023.
Child Tax Credit In 2023: How To Claim It
In 2021, the American Rescue Plan Act expanded the child tax credit to between $3,000 and $3,600 per eligible child. The expanded child tax credit, however, ended in December last year.
Despite several efforts, Congress has been unable to extend the expanded child tax credit so far. The expanded child tax credit proved a lifeline for millions of families; thus, its end was a big blow to families struggling due to the effects of inflation.
Though the $3,600 credit isn’t available anymore, the good news is that qualifying families will still be able to claim up to $2,000 in child tax credit in 2023. Recently, the IRS made it clear that many families will still be eligible for a payment of up to $2,000 for the 2022 tax year.
One mustn’t forget that the child tax credit existed even before the COVID-19 pandemic. The American Rescue Plan Act only expanded the credit amount, as well as made it more liberal.
Now eligible families will be able to claim the usual child tax credit amount, i.e., up to $2,000 for the 2022 tax year. Of the credit amount of $2,000, a total of $1,400 will be refundable. It must be noted that the American Rescue Plan Act made the entire credit refundable.
So, the expanded child tax credit may not be available, but qualifying families will still be able to claim the usual child tax credit that existed prior to 2021.To claim the child tax credit in 2023, you must file a 2022 tax return. The IRS will start accepting the returns in late January.
How Much Could You Get?
To qualify for the child tax credit, you and your child must meet specific criteria. Also, your income should fall below a certain threshold. The credit amount phases out or reduces if your income is above a certain limit.
To know more about the eligibility requirements, visit this link.
For the 2022 tax year, your modified adjusted gross income should be $200,000 or below (or $400,000 or below if married and filing jointly) to claim the CTC of $2,000. Those with modified adjusted gross income above this limit, the credit amount will be reduced by $50 for each $1,000 of income exceeding the threshold income.
In addition to the child tax credit amount, there is another way you can benefit from it. The CTC is partially refundable, meaning it can help you to reduce your tax bill on a dollar-for-dollar basis.
This article originally appeared on ValueWalk
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