Child tax credit update: How much is the payment this year and who is eligible?
Asher Notheis
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The child tax credit returned to its normal amount this tax year as the effects of the coronavirus pandemic move into the rear-view mirror.
This tax credit is available for each qualifying child with a Social Security number that a tax filer has and will provide a maximum tax credit of $2,000 per child who is 17 and under. The credit is available for eligible tax filers whose annual income is not more than $200,000 (or $400,000 for tax filers filing a joint return), according to the Internal Revenue Service.
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In previous years, the child tax credit had been worth $3,600 for children 5 and under and $3,000 for children ages 6 to 17. This expanded credit was expanded in response to COVID-19 and has reverted back to its original value, according to CNET.
To be eligible for this credit, a tax filer must have a child who is younger than 17, provided no more than half of the child’s financial support during the year, lived with the filer for over half of the year, and properly claim the dependent on the filer’s tax return. Additionally, the dependent of the taxpayer must not have filed a joint return with a spouse for the tax year and also be a citizen, national, or resident alien of the United States.
If a filer’s annual income is higher than $200,000 (or $400,000 for joint filers), the amount of child tax credit the filer receives will go down by $50 for every $1,000 in which the income is above the limit. This credit is then completely phased out at $240,000 for individual filers and $480,000 for joint filers.
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To claim this credit, eligible filers can do so by entering their children and/or dependents on Form 1040, U.S. Individual Income Tax Return. This form can then be attached to a finalized Schedule 8812, Credits for Qualifying Children and Other Dependents form.
Taxpayers should also know that several states offer their own tax credits that families can take advantage of. These states include California, Idaho, Maine, Colorado, New Mexico, New York, Connecticut, Maryland, Massachusetts, Vermont, New Jersey, and Oklahoma.