T.he Child Tax Credit (CTC) is a tax credit provided by America A government that supports families with dependent children.
It was introduced as part of the Taxpayer Relief Act of 1997 and has since been expanded and amended several times.
It should be noted that credits are partially refundable. This means that if the credit exceeds the unpaid tax amount, the excess amount may be refunded to the taxpayer.
Child tax credit eligibility depends on several factorsAge of child, relationship with taxpayer, status of residence, etc. There are also income limits that apply. That is, the deduction will be gradually phased out for higher-income taxpayers.
Why are there fewer child tax credit payments in 2023?
The U.S. Relief Plans Act of 2021 made significant changes to the child tax credit for the 2021 tax year.
The credit limit has since been increased to $3,600 for children under 6 and $3,000 for children ages 6 to 17.
but, In 2022, the deduction allowed qualifying families to reduce their federal income tax burden by up to $2,000 for each child under the age of 17..
In 2021, the CTC was available to taxpayers with no earned income, but this time eligible beneficiaries must prove they earn at least $2,500.
So these are some of the reasons why the 2022 child tax credit may be smaller this year than in previous years.
Other reasons for child tax credit changes
It may also be due to changes in income, changes in the number of children in the household, changes in children’s ages, or changes in eligibility criteria.
In addition, changes in tax laws or funding levels can also affect deductible amounts.
If you are still unsure, we recommend that you review your tax documents and consult a tax professional to determine the specific reasons for the child tax credit reduction.