Kids and Taxes and Refunds, Oh My!
Once you have kids, it seems that lions, tigers, and bears are the least of your worries. Sometimes life can get chaotic and stressful, especially in the midst of tax season when you are trying to figure out what all of these forms mean or what tax credits you may qualify for. Luckily, we make it easy to navigate without needing the Wonderful Wizard.
Claiming the Child Tax Credit is super easy! When filing, you can claim each qualifying child who has a Social Security number (SSN) that is valid for employment in the United States. Parents and guardians who have higher incomes than $200,000 or $400,000 if filing jointly, may still be eligible to claim a partial credit.
According to the IRS, for the 2022 tax year, in order to be a “qualifying child,” your dependent generally must:
- Be under the age of 17 at the end of the year
- Be your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of one of these
- Provide no more than half of their own financial support during the year
- Lived with you for more than half of the year
- Be properly claimed as your dependent on your tax return
- Not file a joint return with their spouse for the tax year or file it only to claim a refund of withheld income tax or estimated tax paid
- Have been a U.S. citizen, U.S. national, or U.S. resident alien
- You qualify for the full amount of the 2022 Child Tax Credit for each qualifying child if you meet all eligibility factors and your annual income is not more than $200,000 ($400,000 if filing jointly).
What are the forms I need to fill out?
To claim your children or dependents, you must enter them on Form 1040 and attach a completed Schedule 8812. On top of this, you may also qualify for various other tax credits; Child and Dependent Care Credit, Earned Income Tax Credit, Educational credits, and the Adoption Credit and Adoption Assistance Programs. If you have a child or dependent that is NOT a “qualifying child” for purposes of the Child Tax Credit, you may still Qualify for the Credit for Other Dependents.
In the end, the maximum tax credit per qualifying child is $2,000 for children five and under – or $3,000 for children six through 17 years old.
For more information on how this can best benefit you, please reach out to the Professionals at The Center for Financial, Legal, & Tax Planning, Inc., at (618) 997-3436.