Richard Rubin

speaker

1,496 appearances 29 recordings 1 series first heard Oct 2017 last heard Jan 2024

Richard Rubin’s voice in public audio — every appearance, attributed to the second.

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WSJ Your Money Briefing · Clearing Up Child Tax Credit Confusion · 30 Mar 2022 podcast

It's a credit, which means that reduces the total amount of tax you owe by whatever amount you qualify for.

Now, the most common situation, of course, is parents living with their own children, but this can also apply in other situations for people who have custody of children, for relatives who aren't their children, and other situations as well.

And there are income limits for the child tax credit.

So they vary by year, and we can talk about some of the changes that Congress has put into place, but at the very high end,

Once individual income hits $200,000 or married couples income hits $400,000, the entire credit starts shrinking.

So very, very wealthy people can't get the child tax credit, but for the bulk of households, it's available.

Yeah, so Congress made some changes for 2021 only.

So those aren't in effect for tax year 2022.

But for 21, the returns that people are filing right now as we head up to this mid-April deadline.

And they did a few things.

Number one, they increased the size of the credit.

So instead of $2,000 per child, it's up to $3,000 per child or $3,600 per child for those under age six at the end of last year.

Now, those higher amounts start phasing out once income hits 75,000 for individuals and 150,000 for married couples.

You can still get the base 2,000 credit if you're in between that and the 200, 400,000 level.

They also made 17 year olds eligible, which they weren't before.

They also made the credit fully refundable.

So that means that households that are very low-income households that might not otherwise pay income taxes can get the full amount of the credit.

It's essentially like a cash grant.

You can think of it as not a reduction in your taxes.

And then the other big change is they made part of the credit payable in advance.

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