Since the beginning of December, more than 36 million households have received their sixth and last monthly child tax credit advance. A temporary solution, the $1.9 trillion American Rescue Plan, which President Joe Biden signed into law in March 2021, enabled the checks to be issued while the plan was implemented.
Once eligible parents file their 2021 tax returns this year, they will still be able to claim up to half of the total tax credit.
Child-Related Tax Credits
Even though raising children is costly, children can assist their parents in lowering the amount of money they owe. Some of the child-related tax credits that parents may be able to take advantage of when filing their taxes in 2021 were revealed by a report from the US News and World Report.
These are Child tax credits, Child and dependent care credit, Earned income tax credit, Adoption tax credit, The American opportunity tax credit, and The lifetime learning tax credit.
As per the report, the Certified public accountant and spokesperson for TurboTax, Lisa Greene Lewis, said that it is possible that the parent will be able to claim their child as a dependent, in which case they will be eligible for a tax credit, which is actually better than a tax deduction because it lowers their overall tax liability.
$2,000 for Each Dependent Age 17 or Younger
Fortune revealed that the child tax credit for 2022, which they would receive when filing their taxes in 2023, is set to return to $2,000 for each dependent under the age of 17 as of right now. In part, this is due to the fact that Congress failed to authorize an extension of the enhanced benefit or an extension of the monthly payments.
It was also reported that although the IRS has not yet released the income cutoffs for the 2022 benefit, the IRS has previously stated that they will do so soon. Not to mention, there’s still a chance that Congress may act before the child tax credit’s payment level reverts to what it was before the year 2021.