INDONESIAKININEWS.COM - THE child tax credit (CTC) helps families with qualifying children get a tax break. Here's a primer on who is e...
Here's a primer on who is eligible and if there's a limit on how many kids can be claimed.
There is no limit on the number of kids that can be claimed.
The credit was first introduced as part of the Taxpayer Relief Act of 1997 and plays an important role in providing financial support for American taxpayers with children.
The credit for the tax year 2022 is up to $2,000 per qualifying dependent.
They must be under the age of 17 as of December 31, 2022.
This year the credit is partially refundable, and there is an earnings threshold to start claiming up to $1,500 in additional child tax credits, per Northwestern Mutual.
These guidelines will be in place from 2022-2025, according to the Tax Policy Center.
Dependent qualifications
Below is a list of some of the other criteria for a dependent to qualify for a credit, per the Internal Revenue Service (IRS).
They must:
- Be your biological child, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of one of these (eg grandchild, niece or nephew)
- Provide no more than half of their own financial support during the year
- Have lived with you for more than half the year
- Be properly claimed as your dependent on your tax return
- Be a US citizen, national or resident alien
Have a valid Social Security number.
Older dependents and college students may qualify to receive a maximum of $500 each if they meet certain conditions.
Threshold to qualify for full amount of CTC
Parents of eligible dependents must have:
- An adjusted gross income of under $200,000 for single filers
- An adjusted gross income of under $400,000 for married filers filing jointly
As part of President Joe Biden's 'American Rescue Plan' the CTC was temporarily expanded to a maximum of $3,600 in 2021 per child under age six and $3,000 for those aged six to 17.
The extra funds were to provide needed relief to millions of families adversely impacted economically because of Covid-19.
For the first time in US history, many taxpayers also received half of the credit as advance monthly payments from July through December of 2021.
President Joe Biden had sought to extend the enhanced credits.
However, the expanded credit ended after 2021 and reverted back to pre-pandemic thresholds after Congress failed to act.
More recently, a new Republican Senate proposal aims to restart the monthly payments to parents with fresh requirements.
The proposal, called the Family Security Act 2.0, was created by Republican Senators Mitt Romney of Utah, Richard Burr of North Carolina and Steve Daines of Montana, who broadly described it as a “pro-family, pro-life and pro-marriage plan.”
While the federal CTC has reverted back, some states are using their own budget surpluses to provide more relief.
Source: thesun
