The Child Tax Credit system is a system for taxpayers with children to get tax relief under the federal income tax. In 2022, the advanced Child Tax Credit comes with new terms and rules for taxpayers.
The advanced Child Tax Credit has new rules regarding credit payment. There are eligibility rules for taxpayers and the children they are responsible for. And finally, there is a process to receive your advanced child tax credit payment. Let’s look into it.
What Is The Advanced Child Tax Credit (CTC)?
The advanced child tax credit is an improvement to the previous child tax credit system. Under the American Rescue Plan Act, the credits per child have increased. Eligible taxpayers can now receive credits of up to $3600 through monthly payments for every child under age six.
On the other hand, eligible taxpayers with children from age 6 through 17 can receive up to $3,600 in child tax credits. The basic rule is that taxpayers can receive the credit through monthly payments—for under-six children, up to $300, and for school-age children, up to $250.
Eligibility Requirements For Advanced Child Tax Resolution
The advanced child tax credit system is not limited to only parents. Any American taxpayer with dependent wards under 17 who meets income requirements is eligible. Most families across the U.S. fall under this rule. The base rules for receiving the advanced child tax credit payments are as follows.
- The receiver has to have at least one dependent child
- Have to be a United States resident
- Someone else does not claim them as dependent on their tax return.
- As for eligible children, here are the requirements.
- Have to be under 17 years of age
- They have to be a legal dependent of the taxpayer
- Have to be a U.S. resident, national, or citizen
- They do not financially support themselves for over half of the fiscal year.
Income Eligibility Rules For Advanced Tax Credit – Am I Eligible with $0 Of Income?
In terms of income, anyone is eligible if they fulfill the base rules. Individuals earning little or no income are also suitable for payments if they have dependents. The IRS has set the gross income limits for filers to receive their child tax credit.
- Individual taxpayers earning up to $75,000
- Parents or heads of the household earning up to $112,500
- Married taxpayers, joint filers, and widows/widowers earning up to $150,000
After this limit, for every $1000 more the taxpayer earns, the IRS will reduce the credit by $50. As for the guardians with no income, they are still eligible for the payments. In the case of individual taxpayers, CTC payments are capped if your income is equal to or more than $95,000.
On the other hand, CTC payments are capped for joint filers if their income is equal to or more than $170,000. Lastly, the IRS has an online feature to register and receive your CTC payments for those who do not file tax returns.
