What Is 2022-2023 Child Tax Credit: Requirements & How to Claim

Introduction

The Child Tax Credit (2022-2023) is an invaluable financial resource for American families, designed to offset some of the costs of raising children. Since its introduction, significant modifications have taken place that increase benefits for eligible taxpayers. We will cover everything you need to know about the Child Tax Credit in this guide, from eligibility requirements and claim forms through to how best you can claim it on your tax return.

Baby saving money with mother and father

Eligibility Criteria

To be eligible for the 2022-2023 Child Tax Credit, certain criteria regarding your child, income and filing status must be fulfilled.

Child Requirements

  1. The child must be under the age of 17 by the end of the tax year.
  2. The child must be a U.S. citizen, national, or resident alien with a valid Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN).
  3. The child must be related to you by blood, marriage, or adoption.
  4. The child must have lived with you for more than half of the tax year.
  5. The child must not have provided more than half of their own financial support during the tax year.

For more information on these requirements, refer to the IRS Child Tax Credit guidelines.

Income and Filing Status Requirements

Child Tax Credit eligibility may be reduced or eliminated if your income surpasses certain thresholds, see chart for details.

  • Single, head of household, or qualifying widow(er) with dependent child: $200,000
  • Married filing jointly: $400,000
  • Married filing separately: $200,000

Credit Amounts and Limits

For the 2022-2023 tax year, the Child Tax Credit can provide up to an amount equal to $3,600 for children under 6 and $3,000 per child aged 6-17. Furthermore, this credit is refundable, should its value exceed that of your tax liability due, then any excess will be given back as a refund.

For more information on credit amounts and limits, visit the U.S. Department of the Treasury website.

Claiming the Credit

To claim the Child Tax Credit, it is necessary to file a tax return even if it is not required based on your income level. You can claim it using IRS Form 1040 or Form 1040-SR and the Schedule 8812. If you are filing electronically, tax preparation software like TurboTax will guide you through the process and help you claim the appropriate credit amount.

Advance Child Tax Credit Payments

One component of the Child Tax Credit that stands out is Advance Child Tax Credit Payments from the IRS. They’ve been sending these monthly advances based on tax year 2021, each represents part of what families can claim as Child Tax Credit in 2022, if you received advance payments you will need to reconcile them when filing your 2022 return.

To gain more information on Advance Child Tax Credit Payments, visit the IRS page on Advance Child Tax Credit Payments.

Additional Child Tax Credit

If your Child Tax Credit exceeds the total taxes you owe, and is greater than or equal to what’s owed, then an Additional Child Tax Credit could be available as a refundable credit allowing for refund of unused portions of Child Tax Credit.

To claim the Additional Child Tax Credit, complete IRS Form 8812 and attach it to your tax return. 

Impact of the American Rescue Plan

The American Rescue Plan, passed into law in March 2021, introduced several significant modifications to the Child Tax Credit. Some of these adjustments include:

  1. Children aged under 6 can now claim up to $3,600 as maximum credit, $3,000 applies for those between the ages of 6-17 years old.
  2. Making the tax credit fully refundable in 2021.
  3. Allowing eligible families to advance payments of the Child Tax Credit.

For more information on how the American Rescue Plan has affected the Child Tax Credit, visit the White House page on Child Tax Credit.

Conclusion: The 2022-2023 Child Tax Credit can be an invaluable financial resource for families that helps offset the expenses of raising children. By understanding its eligibility requirements and how it’s claimed, families can ensure they take full advantage of this tax benefit. For additional resources regarding this topic visit SmartAsset, Tax Outreach, and Kiplinger.

Frequently Asked Questions (FAQs)

Can I claim the Child Tax Credit for a child who is not my biological child?

Yes, you can claim the Child Tax Credit for a child who is not your biological child, as long as the child is related to you by marriage, adoption, or foster care, and meets the other eligibility requirements.

Can I claim the Child Tax Credit if my child is a full-time student?

Yes, you can claim the Child Tax Credit for a full-time student who is under the age of 17, as long as they meet the other eligibility requirements.

Can I claim the Child Tax Credit if I am a non-custodial parent?

Generally, the custodial parent is eligible to claim the Child Tax Credit. However, if the custodial parent releases their claim to the credit by completing IRS Form 8332, the non-custodial parent can claim the credit.

Can I still receive the Child Tax Credit if I don’t have a job or any income?

Yes, you can still claim the Child Tax Credit even if you don’t have any earned income, as long as you meet the other eligibility requirements. The credit is refundable, which means you can receive a refund if the credit amount is more than the taxes you owe.

How do I know if my income is too high to qualify for the Child Tax Credit?

The Child Tax Credit is subject to income limits based on your filing status. You can refer to the Eligibility Criteria section of this guide for the income thresholds.

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