Are child tax credits happening in 2022?

The qualifying children and dependents are the same as those applied for under the federal child tax credit. The expansion of the American Rescue Plan child tax credit will reduce child poverty by (supplementing) the income of families receiving the tax credit and () making the credit available to a significant number of new families. Gretchen Whitmer, from Michigan, has lobbied for the legislature to repeal previous cuts to the state's Earned Income Tax Credit and restore it to 20 percent of the federal amount as part of any tax package. This session, state legislatures across the country invested in their future, focusing children, families and workers by enacting and expanding state earned income tax credits (EITC), child tax credits (CTC) and other refundable credits.

The amount of your tax liability for excessive prepayments of the child tax credit is reduced to the full amount of refund protection. See below if your state offers (or plans to offer) a child tax credit relief, as well as your state's eligibility requirements. The proposal follows the expiration of an expanded child tax credit that gave families access to monthly child tax credit payments for the first time. The American Rescue Plan increased the child tax credit and expanded its coverage to better help families who care for children.

Of the 16 states that plan to enact a state child tax credit or offer deductions to households with children, only Maryland is awaiting approval by the governor, and no action has been taken so far. If you make a mistake in determining the amount of the child tax credit for which you are eligible, the IRS will automatically set your amount. Under the current child tax credit, children from families with little or no income receive only part of the credit or receive no money at all. In addition, a large cut in the earned income tax credit and other compensation could worsen the situation of millions of children, according to the Center for Budget and Policy Priorities.

Parents haven't received a monthly child tax credit payment since December, and their last check was disbursed with their tax returns this year. However, if you're eligible for refund protection, you won't be required to repay part or all of your advance payments in excess of the child tax credit. Most people who need to repay excess prepayments of the child tax credit will satisfy that balance by reducing their expected federal income tax refund. For additional information on how to determine the amount of the child tax credit you can successfully apply for, see the instructions in Schedule 8812, Credits for Qualifying Children and Other Dependents.

Lucille Guerrido
Lucille Guerrido

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