How Your Child Tax Credit Could Stay Big in 2022 After All
As the end of the year approaches, Americans are getting ready for yet another tax season. Those looking to reduce the size of their tax bills are always on the lookout for credits and deductions to take, but in some cases, a tax break that was available one year can be gone the next.
That looked like it would be the case for the Child Tax Credit, which briefly expanded as one of many temporary measures enacted to provide financial assistance to Americans in the early stages of the COVID-19 pandemic. Although the enhancements to the Child Tax Credit expired at the end of 2021, some lawmakers are now looking for a last-minute extension that would provide additional money to taxpayers on their 2022 tax returns.
The Child Tax Credit provisions in 2021 offered big boosts over what previous law had allowed. Taxpayers could claim up to $3,600 for each child age 5 or younger, along with $3,000 per child age 6 through 17. The law changes also allowed qualifying parents to receive the credit regardless of earned income, and it made the credit refundable. Many taxpayers received a portion of the credit amount in the form of monthly checks or direct deposits during the 2021 calendar year, long before they actually filed tax returns. Enhanced Child Tax Credit amounts were available for taxpayers with earnings up to specified maximum income levels, with phase-outs taking away the extra credit amounts for those with incomes above those thresholds.
Source Fool.com
