Democrats have been trying to expand the Child Tax Credit rules and make it permanent before the Republicans taking over of the House this year.
However, it was scrapped from the 2022 IRA bill and 2023 1.7 trillion dollar Omnibus government funding bill, which means that the Child Tax Credit (CTC) in the USA will revert to pre-pandemic levels at 2,000 dollars per child in 2022 and 2023.
The expansion of Child Tax Credits
The decision to expand CTC is believed to have kept around four million children out of poverty and helped a total of 65 million kids.
It was enhanced by the American Rescue Plan from 2,000 dollars to 3,000 dollars per child for children over six years old and from 2,000 dollars to 3,600 dollars for children under six years old, while its age limit was also changed from 16 to 17.
Will there be Child Tax Credit payments for non-filers in 2023?
Families can receive a return equal to 15 percent of earnings above 2,500 dollars, up to a maximum of 1,500 dollars per kid, and must have at least 2,500 dollars in earned income to qualify for any portion of the credit (referred to as the Additional CTC). In 2023, the refundable part will rise to 1,600 dollars.
It has to be noted that the CTC can only be claimed when a taxpayer is filing their tax return instead of American citizens receiving fully refundable payments, which is what was happening during the COVID-19 pandemic.
Taxpayers claiming the CTC must have an income of at least 2,500 dollars in order to be eligible for some part of the credit. Filers can claim the full credit in the event their Adjusted Gross Income (AGI) reaches 23,000 dollars for individuals and 29,000 dollars for married couples filing jointly.
The CTC, which is given to tax-paying parents or the child’s guardian, applies to children under the age of 17. Income restrictions must be met in order to qualify for the full CTC.
