All the Changes to the Child Tax Credit This Year

All the Changes to the Child Tax Credit This Year

This story is part of Taxes 2023, CNET’s coverage of the best tax software, tax tips and everything else you need to file your return and track your refund.

The child tax credit is one of the biggest tax breaks available to families in the US. Enacted in 1997, it can provide parents with thousands of dollars for each eligible child.

To offset COVID-19’s economic impact, the American Rescue Plan Act greatly increased how much families claiming the credit could receive from their 2021 return. The law also broadened the age of eligible dependents and introduced advance monthly payments of up to $300.

It also made the entire credit refundable so even families that paid little or no federal income tax could receive money.

But those enhancements have expired, and child tax credit benefits (and requirements) have largely returned to their pre-pandemic standards.

For more tax tips, find out when you can expect your refund, and get the lowdown on some surprising deductions.

How much is the child tax credit in 2023?

The maximum tax credit available per child for tax year 2022 has reverted to its pre-expansion level of $2,000 for each child 16 and under

For tax year 2021, the expanded child tax credit was $3,600 for children 5 and under and $3,000 for children ages 6 to 17. (The age requirement was also temporarily extended from under 17 on Dec. 31 to under 18. But that’s gone, too.)  

Do I qualify for the child tax credit?

To be eligible for the tax break for the 2022 tax year, you and your family need to meet these requirements:

  • You must have a modified adjusted gross income, or MAGI, of $200,000 or less, or $400,000 or less if you’re filing jointly with a spouse.
  • The child you’re claiming the credit for must have been under the age of 17 on Dec. 31, 2022.
  • They must have a valid Social Security number.
  • They must be your legally recognized child, stepchild, foster child, sibling, half-brother or half-sister, or a descendant of one of these categories (like a grandchild or niece or nephew).
  • They must have contributed no more than half of their own financial support in the relevant tax year.
  • They must have lived with you for over half the year.
  • You must be claiming them as a dependent on your tax return.
  • You must be a US citizen or resident alien.

Go to the IRS website for more information.

If you search online for information on the child tax credit, you may come across details on the 2021 expanded tax breaks, so double-check that you’re viewing the most recent information.

Mark Steber, chief tax information officer at Jackson-Hewitt, says many government sites keep historical information live “for people playing catchup with their taxes.” 

“Toward the end of last year, there was great expectation the expansion of the child tax credit would be continued. There was some surprise it didn’t happen,” Steber told CNET. “So you might see some discontinuity on some sites.”

How do I claim the child tax credit?

You can claim the child tax credit by entering your eligible children on your Form 1040 and attaching a completed Schedule 8812, Credits for Qualifying Children and Other Dependents

What if the credit is more than what I owe in taxes?

Unlike last year, the child tax credit is once again nonrefundable. Meaning, if your tax liability exceeds what you get from the credit, you forfeit the difference.

You may still be able to claim the additional child tax credit, which refunds up to $1,500 per child. (To see if you qualify for the additional child tax credit, fill out the worksheet for IRS Form 8812.)

If you paid for childcare, you may also qualify for the child and dependent care credit. Depending on your circumstances, you can declare 20% to 35% of your childcare expenses.

The maximum you can claim is $3,000 for one child under 13 or a dependent with disabilities, or $6,000 for two or more. 

You must have some earned income to qualify for this credit, and the care can’t have been provided by a spouse or family member.

Other federal income tax breaks available to families include adoption credits, education credits and the earned income tax credit.

Is there a state child tax credit?

A dozen states — California, Colorado, Connecticut, Idaho, Maine, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oklahoma and Vermont — have some form of tax credit that benefits families, according to the National Conference of State Legislatures. And many others are considering implementing the tax break.

Requirements and benefits vary, so check with your state tax portal for details.

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