Families awaiting their tax returns should not expect to receive as generous a refund as they may have received in previous years. This is due in part to the decreased value of the child tax credit.
While the American Rescue Plan, signed and approved by President Joe Biden, greatly expanded the child tax credit for taxpayers, this expansion is no longer in effect this tax season. Taxpayers who filed their taxes for the 2020 and 2021 tax years received $3,600 for children 5 and under and $3,000 for children ages 6 to 17, according to Marca.
SMALL BUSINESSES PETITION AGAINST BIDEN TAX HIKES
This year, the child tax credit has reverted to its pre-American Rescue Plan value, giving a maximum tax credit of $2,000 per child under the age of 17. This change will be reflected on taxpayers' tax returns.
Other factors that could modify how much one receives from this credit include changes in one's income, how many children a taxpayer has in their household, and changes in eligibility criteria. Beyond this, changes to either the tax code or funding levels could affect the amount one receives from this credit.
To be eligible for this credit, a tax filer must have a child who is under the age of 17 and claim the dependent on their tax return. The child the tax filer is claiming in order to receive this credit must also have lived with the filer for over half of the year, according to the Internal Revenue Service.
Other qualifications for this credit include being a U.S. citizen, national, or resident alien. Lastly, the dependent and his or her spouse must not have used a joint return when filing taxes.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
If a filer's annual income is higher than $200,000 (or $400,000 for joint filers), the amount of child tax credit the filer receives will go down by $50 for every $1,000 that the income is above the limit.
The IRS has a "Where's My Refund" tool for taxpayers to use for free on its website. The tool can generally be used within 24 hours after the IRS acknowledges that a taxpayer has filed their tax return electronically, and those who file by paper should wait four weeks before using it.