To lessen the economic burden of the epidemic, millions of American families got an increased child tax credit in 2021. Nevertheless, because of the program, parents may anticipate another additional child tax credit 2023.
This photo shows a kid holding US dollar bills as the Additional Child Tax Credit 2023 would help create financial assistance to families with children under 17 years old. (Photo by Alexander Mils via Unsplash)
Additional Child Tax Credit 2023 Explained: Who Is Eligible?
Investopedia said the additional child tax credit represents the refundable element of the child tax credit. It may be claimed by families that owed the IRS less than their eligible child tax credit amount. Due to the non-refundable nature of the child tax credit, the supplementary child tax credit reimbursed the taxpayer for any excess amounts. The Tax Cuts and Jobs Act eliminated this section between 2018 and 2025. Yet, the TCJA contains the child tax credit’s refundable credit provisions.
AS wrote that parents of qualifying children must have an adjusted gross income (AGI) of less than $200,000 for single filers and $400,000 for married couples filing jointly to be eligible for additional child tax credit 2023. For every $1,000 (or portion thereof) that exceeds specific restrictions, the credit is reduced by $50.
Those with lower incomes must make at least $2,500 to qualify for the refundable half of the credit. The amount that eligible Americans may claim is a fraction of earnings that are more than that level. You must deduct $2,500 from your “earned income” (Social Security payments and unemployment benefits do not count) to determine how much may be claimed and multiply that amount by 15%.
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How to Claim
CNet said you and your family must fulfill the following criteria to qualify for the additional child tax credit 2023:
- You earn $200,000 or less in modified adjusted gross income (MAGI) or $400,000 if you’re married and filing jointly.
- On December 31, 2022, the kid for whom you are claiming credit was under 17.
- Their Social Security number is current.
- They are your biological or legally adopted kid, stepchild, foster child, sibling, half-brother or half-sister, or a lineal descendant of one of these groups (like a grandchild, niece, or nephew).
- No more than 50% of their financial assistance during the applicable tax year was provided by them.
- For more than half the year, they have resided with you.
- On your tax return, you are listing them as a dependents.
- You are a resident alien or a citizen of the US.
In addition, Wall Street Journal said the children must have a Social Security number for their parents to receive child tax credits on their behalf for children born in 2022 or 2023. Who is a dependant is defined by long-standing regulations in IRS Publication 501.
Even if they don’t owe income tax, low and moderate incomes may be qualified for a payout of up to $1,500 for 2022 or $1,600 for 2023 per kid as a result of the additional child tax credit 2023.
For further details, see the IRS website.
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