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Get a head start on your 2023 finances with a child tax credit – file your 2022 tax return early!

Families that received a child tax credit of up to $3,600 in 2021 due to COVID-19 relief legislation will not be able to receive the same amount in 2023 as there is currently no new relief legislation in place. However, it is still possible for families to claim up to $2,000 in child tax credits in 2023, based on a report released by Value Walk on January 3, 2023.

On December 6, 2022, the Internal Revenue Service (IRS) announced that many families will be eligible to receive a payment of up to $2,000 for the 2022 tax year.

The child tax credit existed prior to the COVID-19 pandemic, and the American Rescue Plan Act merely expanded the credit amount and made it more liberal. Qualifying families will still be able to claim the usual child tax credit of up to $2,000 for the 2022 tax year, with $1,400 of that amount being refundable.

To claim the child tax credit in 2023, a 2022 tax return must be filed, with the IRS set to begin accepting returns in late January. In order to be eligible for the credit, certain criteria must be met, and income must fall below a certain threshold.

For the 2022 tax year, modified adjusted gross income must be $200,000 or below ($400,000 or below if married and filing jointly) to claim the full $2,000 credit, with the amount reducing by $50 for each $1,000 of income above the threshold, according to the IRS.

The child tax credit is partially refundable, meaning it can reduce a tax bill on a dollar-for-dollar basis.

 

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