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$2000 Child Tax Credit in 2023: Are You Qualified?

Child Tax Credit
WASHINGTON, DC - DECEMBER 07: Supporters attend Press Briefing With U.S. House And Senate Champions, Impacted Families on Expanding the Child Tax Credit During Lame Duck Session on December 07, 2022 in Washington, DC. (Photo by Tasos Katopodis/Getty Images for Economic Security Project)

The 2023 tax year is right around the corner, and one of the biggest changes that families should be aware of is the new Child Tax Credit. The Child Tax Credit is a tax credit that families can claim for each of their children under the age of 17. 

The credit intends to help offset the cost of raising children, and it can significantly reduce a family’s tax bill. Here’s what you need to know about the 2023 Child Tax Credit.

Child Tax Credit

WASHINGTON, DC – DECEMBER 07: Senator Michael Bennet (D-CO) speaks during Press Briefing With U.S. House And Senate Champions, Impacted Families on Expanding the Child Tax Credit During Lame Duck Session on December 07, 2022 in Washington, DC. (Photo by Tasos Katopodis/Getty Images for Economic Security Project)

How Much is the Child Tax Credit in 2023?

As a result of the regulations set by the 2017 Tax Cuts and Jobs Act, the credit’s value is lower, and its eligibility is more limited than in 2021. If Congress does not amend the credit before then, these adjustments will remain in force until the fiscal year 2025. 

The ARP made significant adjustments to the one-year credit in 2021 that benefited many families by enabling them to get half of the credit’s worth over six months rather than all at once when they submit their taxes. When they filed their tax forms, the other half of the credit was subsequently claimed, which increased the overall number of returns that the IRS processed. 

USA Today said the maximum tax credit per eligible kid is $2,000 for those under the age of five or $3,000 for those between the ages of six and seventeen. Additionally, unlike last year, you cannot obtain a part of the credit in advance. 

ALSO READ: Child Tax Credit: Residents In Illinois Could Receive Permanent Payment

Eligibility Requirements

AS said that parents who fulfill the qualifying standards and have dependent children under 17 as of December 31, 2022, are eligible for the 2023 Child Tax Credit. Children up to the age of 17 were entitled to the full amount of the significantly greater 2021 Child Tax Credit under the enhanced credit. 

The child must meet the requirements to be claimed as a dependant on the taxpayer’s tax return and spend more than half the year living at the same address as the taxpayer for tax years 2022 through 2025. Over the tax year, the youngster cannot shoulder more than 50% of their financial support. 

In addition, the child must possess an active Social Security number approved for use at employment as a means of taxpayer identification. Individual taxpayer identification numbers, issued by the IRS rather than the Social Security Administration, were required for taxpayers to claim children before the TCJA and under the 2021 boosted version. This implied that legal immigrants and long-term residents might also apply for the credit.

How to Claim Credit

To claim the 2023 Child Tax Credit, you must file a tax return and include the child’s Social Security number on the return. You will also need to provide information about the child’s age, residency, and citizenship status.

It’s important to note that the Child Tax Credit is subject to phase-outs, reducing the credit as your income increases. If your income is above the phase-out threshold, you may not be able to claim the full amount of the credit.

The 2023 Child Tax Credit is a valuable credit that can help families offset the cost of raising children. By claiming the credit, families can receive a significant reduction in their tax bill or receive a refund if they owe no taxes. Be sure to review the eligibility requirements and calculate the amount of credit you can claim to make the most of this valuable credit.

RELATED ARTICLE: $1,200 Child Tax Credit Up For Grabs: Who Is Eligible?

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