One of the most important tax credits to families is the child tax credit (CTC) and the additional child credit (ACTC). When you think of the cost of raising children these days, you love them and want the best for them, but it really helps to have a credit on your taxes for them. Our staff at T.A.X.E.S. will explain the credit and what is required to be able to qualify.
2022 Credit
It is up to $2000 per child. This is a return to the pre-covid amount. You must owe taxes up to $500 for the nonrefundable part of CTC that is added to the refundable amount of ACTC of $1500. This is subject to income phaseouts of AGI of more than $200,000 ($400,000 MFJ).
Age
Only for children under 17 years by the end of 2022. The extended age and different amounts for children was only for tax year 2021. We realize that most children are still in high school at 18, but we have returned to the previous IRS rules for credits, much to the dismay of parents.
Requirements
A Social Security number is required for each child. The child needs to live with a parent for over half of the year. Or a parent has to have a signed form 8332 as a release of claim from the custodial parent. The IRS does not recognize court documents as to custody. This is an important issue, when there is a divorce or legal separation and requires very specific details.
You may be able to take the dependent tax credit instead (ODC). We at T.A.X.E.S. can help you to determine if you can qualify for the $500 credit for an older child or a qualifying relative.
There are many more taxing matters for the 2022 tax season. Now is the time to also consider planning for the 2023 taxes. In the future read more at Alltaxingmatters.com.
Bruce Bevan AFSP, Owner of T.A.X.E.S.
513-897-1040
bruce@your1040tax.com