During the coronavirus pandemic, the American Rescue Plan temporarily boosted the maximum Child Tax Credit amount to $3,000 (children between the ages of 6 and 17) and $3,600 (children under age 6) for the 2021 tax year. It also allowed eligible taxpayers to receive a portion of the credit through automatic monthly payments instead of waiting to claim the full amount when filing their taxes. Although lawmakers made a last-ditch effort to keep the Enhanced Child Tax Credit changes in place for the 2022 tax year, the credit has now reverted to its pre-COVID amount. So, how much is the Child Tax Credit worth this tax filing season? Here’s what you need to know.
How Much is the Child Tax Credit Worth?
When the Child Tax Credit (CTC) was originally introduced under the Taxpayer Relief Act of 1997, it was worth $500 per child. It was also a non-refundable tax credit. Four years later, the credit amount was increased to $1,000 and became partially refundable. Then, in 2017, President Trump made significant changes to the CTC under the Tax Cuts and Jobs Act (TCJA). The TCJA doubled the maximum credit amount, increased the income limit for phaseout, and increased the refundable credit amount.
For the 2022 tax year, the Child Tax Credit returns to its pre-COVID amount of $2,000 per qualifying dependent. Since the CTC is a refundable tax credit, you may be eligible for a tax refund of up to $1,500 per child if the credit amount exceeds your total tax liability.
CTC Income Limits
The income limits for the CTC have reverted to the 2020 tax year levels, as well. That means more taxpayers will qualify for partial or full credit. If your modified adjusted gross income (MAGI) exceeds the phaseout limit for your filing status, the credit is reduced by $50 for each $1,000 over the limit until it is eliminated.
|Filing Status||2021 Tax Year MAGI Phaseout||2022 Tax Year MAGI Phaseout|
|$3,000 per child (6-17 years old) or $3,600 (children under 6)||$2,000 per child|
|Head of Household||$112,500||$200,000|
|Married Filing Separately||$75,000||$200,000|
|Married Filing Jointly||$150,000||$400,000|
Who Qualifies For The CTC?
To qualify for the Child Tax Credit, you must have at least $2,500 in earned income. You must also have a Social Security number (SSN) or individual taxpayer identification number (ITIN) issued on or before the due date of your 2022 tax return (April 18, 2023). Additionally, your qualifying child must meet these six tests:
- Age – your dependent must be 16 or younger at the end of the tax year.
- Relationship – they must be your child (natural, adopted, step, or foster), sibling (natural, half, or step), or a descendant of any of these people.
- Dependent Status – you must claim the child as your dependent. In most cases, the child cannot file a joint tax return unless it is to claim a refund of taxes withheld or estimated taxes paid.
- Residency – your child must have also lived with you for at least half of the tax year.
- Support – you provided at least half of your child’s financial support during the tax year.
- Citizenship – any child you are claiming must have a valid SSN and be a U.S. citizen, U.S. national, or U.S. resident alien.
If you and your dependent(s) do not meet these requirements, or your income is too low or too high, you are ineligible to claim the Child Tax Credit.
How to Claim The Child Tax Credit
To claim the Child Tax Credit, you will need to file Form 1040 or 1040-SR. Additionally, you will need to complete Schedule 8812, Credits for Qualifying Children and Other Dependents, to determine your CTC amount. This form must be submitted with your tax return. If you are using tax software, you’ll be asked a series of questions that will determine your eligibility and prepare the forms for you.
Depending on your income level, you may also qualify for free tax help through the Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) program. You can also work with a paid tax professional to ensure you get the maximum credit you deserve.
Please note that the IRS won’t issue your full tax refund until at least mid-February if you claim the CTC and are due a refund.
Credit For Other Dependents
If you claim a dependent on your tax return but they don’t qualify for the Child Tax Credit, you may be eligible for the Credit for Other Dependents (ODC). This non-refundable tax credit has a maximum value of $500 per eligible dependent. The ODC can be claimed for:
- Dependents of any age (even those over 18) who are U.S. citizens, U.S. nationals, or U.S. resident aliens.
- Dependents who have an SSN or ITIN.
- Dependent parents or other qualifying relatives.
- Dependents living with you but not related to you.
You cannot claim the ODC and the CTC together. You can, however, claim the ODC in addition to the Child and Dependent Care Credit and the Earned Income Tax Credit.
There’s Still Time to File For The 2021 Expanded Child Tax Credit!
Although the deadline to file your 2021 taxes has passed, you can still claim any refund you may be due under the Expanded Child Tax Credit. You have until April 18, 2025, to file a paper tax return and claim the credit. If you already filed and neglected to claim the CTC for 2021, you can also file an amended tax return. Failure to file within three years of the original deadline date will result in the forfeiture of any refund you may be owed.