A guide to the 2022 child tax credit

A mother with her baby
A mother with her baby svetikd/Getty Images
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Tax season is upon us, and tax credits are a good way to lower your bill. Parents and guardians should take note this year, as Kiplinger reports that "[o]ne of the most significant changes for 2022 was to the child tax credit."

Unfortunately, the shifts weren't in the right direction for the tens of millions of parents who claim the tax credit annually: The enhanced child tax credit of 2021 is "bigger and better" no more, Kiplinger says. Instead, things are reverting back to the way they were for the 2020 tax year.

Here's a rundown of the changes to know about for filing your taxes this year, as well as a refresher on what the child tax credit is and who's eligible.

What is the child tax credit?

The child tax credit is a tax break for parents and guardians of qualifying children (more on eligibility later). As Tax Foundation explains it, the credit "allows low- and moderate-income families to reduce their tax liability dollar-for-dollar by up to $2,000 for each qualifying child." For those whose income exceeds certain limits, the credit phases out incrementally.

While it might sound similar, the child tax credit is not the same as the child and dependent care credit. Nerdwallet breaks down the difference between these two similar-sounding credits: "The child tax credit is a tax incentive for people with children, while the [child and dependent care credit] is another tax credit for working parents or caretakers designed to help offset expenses such as day camp or afterschool care. Both credits have different rules and qualifications."

What's changing for the child tax credit?

The temporary expansion of the child tax credit for last year ended up being just that — temporary. Here are some of the biggest changes to note:

  • Credit amounts are lower, and 17-year-olds are no longer eligible. For tax year 2022, the child tax credit is $2,000 per child under 17 who's claimed on your tax return as a dependent. Last year, the credit was bumped up to $3,000 per child ($3,600 per child under age 6), and it allowed children who were 17 to qualify.

  • The credit is no longer fully refundable. Previously, the credit was made fully refundable "for families who lived in the U.S. for more than six months during 2021 and removed the $2,500 earnings floor," states Kiplinger. Now, only up to $1,500 of the credit is refundable for eligible families. Additionally, it's necessary to have brought in at least $2,500 of earned income to get that partial refund.

  • Advanced payments aren't offered. Whereas in tax year 2021, half of the credit was sent in advance to families from July 2021 to December 2021, families will not receive advance payments this year.

  • There are changes to who is eligible. In tax year 2022, the credit is available for those who earned up to $200,000 as a single taxpayer or head of household (up to $400,000 for those married filing jointly). In 2021, however, those limits were $75,000 for single filers, $112,500 for heads of household, and $150,000 for couples married filing jointly.

Who qualifies for the child tax credit?

Regardless of how you feel about the changes to the child tax credit, a tax break is still a tax break. But before you start in on your return, it helps to know whether or not you're actually eligible for the child tax credit. For a child to qualify in tax year 2022, they must:

  • Be under 17 years old at the end of the year

  • Be your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of one of these, like a niece or grandchild

  • Be a U.S. citizen, U.S. national, or U.S. resident alien

  • Have lived with you for over half of the year

  • Provide no more half of their own financial support annually

  • Be claimed as a dependent on your tax return

  • Not file a joint return with their spouse for the tax year, or file it only to claim a refund of withheld income tax or estimated tax paid

Meanwhile, parents or guardians are eligible if their adjusted gross income (AGI) is under $200,000 when filing individually or as head of household, or under $400,000 if married filing jointly.

How can you claim the child tax credit?

If your eligibility checks out, you might be left wondering: How do I actually go about claiming this tax credit? USA Today explains that you can get the credit "by listing your children and other dependents on a 1040 form, which is the U.S. individual income tax return. You must also complete a schedule 8812 for qualifying children and other dependents."

Becca Stanek has worked as an editor and writer in the personal finance space since 2017. She has previously served as the managing editor for investing and savings content at LendingTree, an editor at SmartAsset and a staff writer for The Week. This article is in part based on information first published on The Week's sister site, Kiplinger.com

New Tax Rules for 2023: Download your free issue of The Kiplinger Tax Letter today.  No information is required from you.

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