In this YouTube video, Logan Allec looks at child tax credits for 2021. Knowing when a person may be eligible to claim it can be confusing if they are not familiar with the rules.
The child tax credit was only increased for 2021, not previous years. The changes currently do not apply for 2022.
These tax credits are refundable. Depending on how much a person’s tax liability is for the year, the total of the qualifying child tax credit may wipe out a person’s tax liability. Additionally, the person could then receive any credit amount based on that new non-liability as well.
Income limitations can complicate these things. Singles cannot have more than 200k, and married couples cannot have more than 400k to qualify. With the new rules, if a person is single and their adjusted gross income is less than 75k for the year, a head-of-household with less than 112k, and married filing jointly with less than 150k does not have to worry about the phase-out amounts for any portion of the child tax credit. The additional tax credit amount (not the base amount) can be phased out if the income is above that.