February 20, 2023

Child Tax Credits Reduced for 2022 Tax Filings

By Heather L. Santonino, Partner, Tax & Business Services

Child Tax Credits Reduced for 2022 Tax Filings Tax Credits & Incentives

Some parents will be surprised to see lower refunds when they file their 2022 tax return. This is because the 2022 child tax credits are significantly less than the 2021 credits.

In 2021, the federal government gave taxpayers additional credits: Those who qualified received a $3,000 credit per child for children ages 6-17, and $3,600 for children under the age of six. For 2022, the per-child credit is $2,000. It is available to single, married filing separate, and head of household filers with modified adjusted gross income (MAGI) of $200,000 or less ($400,000 MAGI or less for joint filers). Above these thresholds, the credit amounts begin phasing out in increments of $50 for every $1,000 of additional MAGI.

The credits in 2021 were also fully refundable, but in 2022 only up to $1,500 of the credit is refundable if the taxpayer meets certain income thresholds.

The Child and Dependent Care credit was also significantly reduced. In 2021 some taxpayers could receive a maximum credit of $8,000, but that amount was reduced to $2,100 in 2022. Given these changes, using a 2021 tax return for any planning and computations for parents in the process of divorce requires special consideration. Please feel free to contact the Marcum Matrimonial Team if we can be of any assistance.