Child Tax Credit for 2022 (And if You Never Got 2021)

The child tax credit will go back to normal in 2022. This post explains those rules as well as what you should do if you never got the advanced child tax credit for 2021.

This post is provided for general information only. Please confirm the details and circumstances of your unique situation with your tax accountant or other appropriate advisor before taking action.

2022 Child Tax Credit

For the 2022 tax year, the credit goes back to $2,000 per eligible child. You will no longer receive monthly payments. You can claim the credit when you file your 2022 tax return in April 2023.

You qualify if

  • The child is your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew).
  • The child was under age 17 at the end of 2022.
  • The child did not provide over half of his or her own support for 2022.
  • The child lived with you for more than half of 2022. Exceptions to this requirement include divorced or separated parents, boarding schools, and medical care.
  • The child is claimed as a dependent on your return.
  • The child does not file a joint return for the year (or files it only to claim a refund of withheld income tax or estimated tax paid).
  • The child was a U.S. citizen, U.S. national, or U.S. resident alien.

Your credit may be reduced if your AGI as a joint filer is more than $400,000 or $200,000 for as a single filer or head of household.

To learn more, see IRS Schedule 8812 (includes the special rules for 2021) or the 2020 IRS Publication 972 (has the usual rules). The IRS typically updates its documents for the current year (2022) late in the calendar year.

Do married couples get child tax credits?

Married couples get one tax credit per child according to the usual rules. If you file jointly, include each eligible child on your tax return. If you file separately, you can choose who should claim each child to maximize your tax benefits.

How does the child tax credit work for divorced parents?

Only one parent can claim a tax credit per child even if the parents are divorced. The default rule for divorced parents is that you apply the IRS rules (such as who the child lives with for more than half of the year) to figure out who can claim the credit.

It’s common to agree how to handle the Child Tax Credit as part of your divorce agreement. You might choose which parent gets it, alternate years, or, if you have multiple children, divide up your children for tax credit purposes. If you do this, you also have to file a Form 8332 with the IRS.

Who claims a child on taxes with 50/50 custody?

Even with 50/50 custody, there’s probably one parent who the child spent just a little more time with or who otherwise meets the rules just a little bit more than the other. The best solution to avoid disputes is to work out an agreement in advance.

Can a stepparent claim a stepchild on taxes?

A stepparent can claim a stepchild on taxes. They are treated as a parent for Child Tax Credit purposes. There is still only one tax credit per child based on the IRS rules or what the parents agree to.

Can foster parents claim a child on taxes?

A foster parent can claim a child they are fostering on taxes. They are treated as a parent for Child Tax Credit purposes. There is still only one tax credit per child based on the IRS rules or what the parents agree to.

Check with your accountant to see if you’re able to qualify for the tax credit in short-term fostering situations.

Can you sue someone for claiming your child on taxes?

If someone claims your child on your taxes without your permission, the IRS will generally resolve the situation.

  • File your tax return based on what you believe is correct.
  • If the IRS rejects your electronic return, mail a paper return and include a letter explaining why you should get the Child Tax Credit.
  • The IRS will mail a letter to both people who claimed the child. The letter will ask for information proving who qualifies for the credit. If you have a signed agreement or court order saying who should get the credit, the IRS will use that.
  • The IRS will make a decision and adjust both tax returns appropriately.

If you still have concerns, an attorney may be able to help you with things like making sure an ex-spouse is following your divorce agreement.

Why do you lose the Child Tax Credit at age 17?

The rules for the Child Tax Credit say that you get it for a child who was under 17 at the end of the tax year. The rules are based on the tax law passed by Congress. The last major update to the Child Tax Credit was in the 2018 Tax Cuts and Jobs Act under President Trump.

In terms of why they picked under 17 as the age when you’re not a legal adult until 18:

  • When Congress changes tax laws, it still has to balance the budget and may set rules to limit certain tax credits.
  • Once a teenager reaches driving age, they are less dependent on their parents and more able to get a job.

Special Rules for 2021

Part of the American Rescue Plan Act was an advanced payment of the Child Tax Credit. Here’s how it impacted 2021 taxes filed in April 2022.

What’s changing for 2021?

For 2021 only (tax returns filed in April 2022), the Child Tax Credit for children under 17 changes in the following ways:

  • The $2,000 credit increases to $3,000 for children between 6 and 17
  • The $2,000 credit increases to $3,600 for children under 6 at the end of 2021
  • Taxpayers will receive a monthly advance equal to half of their estimated credit during the final six months of 2021. That’s July through December.
  • The credit includes children who turn 17 during 2021.

What if I didn’t get the payments or claim the Child Tax Credit on my tax return?

If you didn’t claim the Child Tax Credit when you filed and never got the advanced payments, file an amended tax return.

You may be eligible for the tax credit even if you didn’t receive the advanced payments. The IRS used the information it had at the time to determine who should get the advanced payments, but your eligibility for the tax credit is determined on your 2021 tax return.

Why did the IRS reduce my tax refund when I never got the advanced payments?

If you filed for the Child Tax Credit on your 2021 tax return because you never got the advanced payments or they were less than you should have gotten:

  1. Check your online IRS account to see what payments they say you got and when.
  2. Check your bank statements to make sure you didn’t get the payment.
  3. If you got a notice in the mail, respond to it saying that you never received the payment and you want a payment trace. A payment trace is when the IRS figures out what happened to your payment.

It is really hard to get someone on the IRS on the phone right now. Millions of people are having similar problems. The only thing you can do is keep calling.

What if my payment was issued but I never received it?

If the IRS sent you Letter 6419 or another notice saying you got Advanced Child Tax Credit payments you never received, you can use Form 3911, Taxpayer Statement Regarding Refund.

You can use Form 3911 at least

  • 5 days after the direct deposit date
  • 4 weeks after a mailed check to a standard address
  • 6 weeks after a mailed check and you have mail forwarding with the Post Office
  • 9 weeks after a mailed check and you have a foreign address

You can view the IRS instructions here. Mail your completed Form 3911 to the address where you would mail your tax return.

Who qualifies for the expanded tax credit?

To qualify for the additional amounts and advanced payments, you will need an AGI under $150,000 for joint filers, $112,500 for heads of household, and $75,000 for single filers. Those with incomes slightly above the cutoff may see a reduced payment.

How will the IRS decide who qualifies?

The IRS will use information from your 2020 tax return to determine your eligibility. If they haven’t received and processed your 2020 return, they will use 2019.

If you didn’t previously qualify, for example you had a baby in 2021, you can claim the full credit when you file your tax return.

Will the Child Tax Credit advance affect my refund?

It is possible for the Child Tax Credit advance to reduce your tax refund. Unlike the stimulus payments, this is not an entirely new tax credit. $2,000 is an existing credit, and $1,000 of that will be advanced.

Let’s say your 2020 and 2021 tax returns will otherwise be identical. In 2020, you got a $2,000 Child Tax Credit which turned into a $2,000 refund. In 2021, we’ll assume your child’s age gets you $3,000.

  • You will get half of that $3,000, or $1,500, as six monthly payments of $250 during the second half of 2020.
  • You will get the other half, or $1,500, when you file your tax return.
  • When you file your tax return, the amount of Child Tax Credit you’re claiming for refund is now $1,500 instead of $2,000. Even though the total credit is bigger this year, you already got part of it.
  • That means your refund will be $500 smaller than the $2,000 you got in 2020.

Even though you get more total money, remember your 2021 refund may be smaller or you could end up owing money based on the other taxes you owe. It’s similar to having changes in your withholding or estimated tax payments.

Is the advance income?

The advance payments are not income. They are a tax credit that is being paid early instead of you having to wait until you file your tax return. There is no tax on these payments.

Problems with the Child Tax Credit

If you received a CP12 Notice or other IRS notice saying your Child Tax Credit was incorrect, follow the instructions on that notice to respond. You’ll typically need to provide additional proof that you met the eligibility requirements.

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