Parents have lots of questions about how to report the child tax credit and last year’s monthly payments on their tax return and we have answers.
The IRS’s 2022 tax filing season has begun. The tax agency started accepting individual tax returns for the 2021 tax year on January 24. And the filing deadline for most individual returns is April 18. When you prepare your return, or alternatively, gather your records to take to your accountant or other paid return preparer, you’ll want to keep in mind the tax changes that applied for 2021…and how they should be reported on your return. One of the most significant changes for 2021 was to the child tax credit, which is claimed by tens of millions of parents every year.
The child tax credit for the 2021 tax year is bigger and better than ever, when compared to 2020. The credit amount was significantly increased, and the IRS made monthly advance payments to qualifying families from .
The 2021 child tax credit changes are complicated and don’t help everyone. For instance, there are two ways in which the credit can be reduced for upper-income families 500 credit score loan. That means some parents don’t qualify for a larger credit and, as before, some won’t receive any credit at all. More children qualify for the credit on 2021 returns. And, this year, when you file your 2021 tax return, you’ll have to reconcile the advance payments you received with the actual child tax credit you’re entitled to claim.