Be aware of changes to the child tax credit
Q: I’m getting ready to file my 2022 tax return. Have there been any changes in the child tax credit from the year before?
A: All of the 2021 expansions are gone, with the rules reverting back to those that were in place for filing 2020 returns. For 2022 tax returns, which are filed in 2023, the child tax credit is $2,000 per kid under the age of 17 claimed as a dependent on your return.
The child must be related to you and generally live with you for at least six months during the year.
And the child must be a citizen, national or resident alien of the United States and have a Social Security number.
You have to put the child’s name, date of birth and Social Security number on your tax return, too.
The credit begins to phase out if your 2022 modified adjusted gross income (AGI) exceeds $400,000 on a joint return or $200,000 on a single or head-of-household return.
Once you reach the $400,000 or $200,000 modified AGI threshold, the credit amount is reduced by $50 for each $1,000 (or fraction thereof ) of modified AGI over the applicable threshold amount.
The credit is no longer fully refundable, either.
Q: What does it mean that the child tax credit is no longer fully refundable for 2022? A:
For the 2021 tax year, the expanded child tax credit was fully refundable for families who live in the U.S. for more than one half of the year. This meant that people who qualified for the child tax credit received the full credit as a refund, even if they had no tax liability. This has changed.
For 2022, certain low-income people can only get up to $1,500 per child as a refund, instead of the full $2,000 child credit, if their child credit exceeds the taxes they otherwise owe.
Q: Can I take the child tax credit on my return for my daughter who turned 17 in 2022? A:
No. Seventeen-year-olds qualified as eligible children for the child credit for 2021, but not for 2022. The qualifying age for children for 2022 is 16 and under.