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Child Tax Credit 2022 update — Americans can get direct payments up to $750 – but deadline to apply is just weeks away

Child tax credit 2022: How much is it and when will I get it?
Nine states with their own child tax credit programs
Can both parents claim child tax credits?

HUNDREDS of thousands of Americans can get direct payments of up to $750 - but they only have four weeks to apply.

Governor Ned Lamont signed the 2022 Connecticut Child Tax Rebate into law on May 9, and families have until July 31 to apply for the direct payments.

Connecticut had a whopping budget surplus of about $4billion and sent some of it back to taxpayers.

Lamont said that he expects payments to go out in August, around the start of the school year.

"I strongly urge all eligible families in Connecticut to submit an application so that the rebate can be sent to you with no delays,” he said.

Various states are offering child tax credits, including California, Idaho, Maryland, New Mexico, New York, and several other states.

Read our child tax credit live blog for the latest news and updates…

  • Jennifer Korn

    Child care professionals can apply for $1,000 bonuses

    Delaware is thanking child care professionals for working during the pandemic by rewarding them with $1,000.

    The state is allocating $10.6 million of funding from the American Rescue Act to make this happen, according to a statement by the Department of Education.

    To be eligible, you must meet all of the following requirements: 

    • Be at least 18 years of age
    • Employed in licensed Delaware child care programs
    • Have engaged directly with children for a minimum of 20 hours per week for at least 90 days

    “COVID-19 highlighted just how essential their work is every day,” Secretary of Education Mark Holodick said.

    “Many of our licensed child care programs remained open throughout the pandemic, providing critical care for children and allowing their families to continue their work in our hospitals, correctional institutions, police and fire stations and other essential jobs.”

  • Jennifer Korn

    Public sentiment on expanded CTC was positive

    In January, shortly after the expanded child tax credit expired, The New York Times wrote that the tax credit was praised by experts, but garnered a more “lukewarm” reaction from the general population.

    The policy generally received more than 50 percent support in public opinion polls but seemed less important to voters than other policies like lowering prescription drug costs, according to the Times.

  • Jennifer Korn

    Monthly stimulus checks proposed for families

    Utah senator Mitt Romney recently put forward the Family Security Act that would be similar to the child tax credit.

    Eligible families with children up to five years old would receive $350 a month, and $250 for children six to 17-years old.

    By comparison, the child tax credit gave families $300 a month for children under six and $250 for children between six and 17.

    The bill has yet to be formally proposed but could end up being bipartisan, with it being negotiated by both sides of Congress.

  • Jennifer Korn

    Americans learning they don’t qualify for IRS cash back

    The IRS has stated that it is detecting errors in requests for the recovery rebate credit and child tax credits this tax season.

    The following are errors that can occur, leading to delays on your IRS tax refund:

    • Information errors
    • Math errors
    • Stimulus money wasn’t for everyone
  • Jennifer Korn

    Delays in requests: Money wasn’t for everyone

    The third economic impact payment was worth up to $1,400 per qualified individual or $2,800 for couples.

    Each qualified dependant received an extra $1,400.

    Because it was dependent on income, not everyone was eligible for the third stimulus payment.

    The following taxpayers did not meet the requirements:

    • Individuals having a yearly gross income of more than $80,000
    • Couples filing jointly with an AGI of more than $160,000
    • A household head having an AGI of more than $120,000

    The third round of stimulus funding was based on information from your 2019 and 2020 tax returns.

  • Jennifer Korn

    Delays in requests: Math errors

    The IRS handed out more than 9.4million arithmetic mistake letters in April, according to the National Taxpayer Advocate, an independent entity within the IRS.

    Here are a few examples of math errors:

    • Dependents are over the legal drinking age.
    • The primary or secondary Social Security number is incorrect or missing.
    • The adjusted gross income (AGI) exceeds the maximum amount that can be claimed.
    • The amount was calculated erroneously.
  • Jennifer Korn

    Delays in requests: Information errors

    People whose information on tax forms did not match IRS data began receiving letters from the IRS.

    Notices for CP2100 and CP2100A are distributed twice a year.

    A first letter will be sent out in September and October, followed by a second mailing in April the following year.

    The alerts tell payers that the return’s information is lacking a taxpayer identification number (TIN), has an erroneous name, or both.

    If you receive a notification, it’s critical that you respond, since failing to do so may cause any refunds owing to you to be delayed longer.

  • Jennifer Korn

    Full 2021 tax credit

    In 2021, a full $3,600 child tax credit was available to couples making less than $150,00, or $75,000 for singles.

    Millions of families received up to $300 per child in monthly payments from July to December 2021 if they were eligible.

    They were able to claim up to $1,800, followed by another $1,800 on their tax returns this year.

  • Jennifer Korn

    ‘The child tax credit was a lifeline’

    Sarah Anderson lost both her jobs during the pandemic.

    The mother of four from Durham, North Carolina, told NPR “the money wasn’t a replacement for that income, but it just helped keep everything afloat.”

    Anderson said she used the money to pay for basics like gas, food, and other bills, and she worries about the future after Congress failed to renew the program.

  • Jennifer Korn

    Ten more CTC proposals since 2019

    According to the National Conference of State Legislatures, in addition to the states with existing child tax credits, 10 more have proposed state child tax credits since 2019.

    New York and California lawmakers have already proposed legislation that would expand their CTC programs.

  • Jennifer Korn

    States introduce CTC programs

    At least nine states have created their own child tax credit to supplement the federal credit.

    Six of them — CaliforniaColoradoMarylandMassachusettsNew Mexico, and New York — have refundable credits.

    MaineIdaho, and Oklahoma have introduced non-refundable child tax credits.

  • Jennifer Korn

    Refundable vs non-refundable tax credits

    Tax credits fall into two major categories based on how they can impact your tax liability.

    A refundable tax credit, according to the IRS, allows taxpayers to reduce their tax liability to $0 and receive a refund if the credit amount exceeds the burden.

    For example, if you owe $1,500 in taxes and earned a $2,000 tax credit, your tax bill will be wiped out and you’ll get $500.

    Non-refundable tax credits can reduce your tax liability to $0, but you’ll forfeit any remaining credit after your burden is $0.

  • Jennifer Korn

    Federal credit is partly refundable

    Typically the child tax credit is only partially refundable, but in 2021 the entire credit was refundable.

    For 2022, the federal credit is 70 percent refundable.

    That means even if your tax bill was $0 and you received the maximum $2,000 benefit, you’d only be able to collect $1,400 on your refund.

  • Jennifer Korn

    Connecticut CTC Rebate applications open

    Connecticut’s one-year child tax refund program, which was included in the recently updated state budget, began accepting applications on June 1, per News12.

    Governor Ned Lamont recently said that up to $250 in refunds per child will be delivered in late August.

  • Jennifer Korn

    Income thresholds for Connecticut’s $250

    The income thresholds to receive the Connecticut Child Tax Rebate, according to GoBankingRates, are as follows:

    • Single or married filing separately: $100,000 or less
    • Head of household status: $169,000 or less
    • Married filing jointly: $200,000
  • Jennifer Korn

    Connecticut rebate intended for low-income families

    The rebates are limited to a maximum of $250 per child under the age of 18 up to three children per household ($750 maximum) and will be based on the taxpayer’s income limits, GoBankingRates reports.

    The rebate program is intended for low- to middle-income families, but higher-income families may be eligible for a reduced reimbursement.

  • Jennifer Korn

    Thousands of CT families to get $250

    According to GoBankingRates, 300,000 Connecticut households will soon benefit from the most significant tax relief in the state’s history.

    The 2022 Connecticut Child Tax Rebate is part of Gov Ned Lamont’s recently enacted 2023 fiscal year budget adjustment.

    According to a news release issued by the State of Connecticut on May 19, the one-year state budget contains $663million in tax savings, including a $250 child care tax credit, which is identical to the federal enhanced child tax credit that expired earlier this year.

  • Jennifer Korn

    How to compute adjusted gross income

    The first step in computing your AGI is to determine your total gross income for the year.

    Your gross income includes your salary and any earnings from self-employment ventures, investment dividends, retirement income, and things of similar nature.

    To arrive at your final AGI, you will subtract certain amounts from your total income.

    For example, teachers can deduct unreimbursed classroom expenses, self-employed people can deduct insurance premiums, and everyone can deduct charitable donations.

    An income calculator might be helpful during this process, and you can find one on TaxAct or TurboTax.

  • Jennifer Korn

    Adjusted gross income explained

    When filing, your eligibility for certain tax credits and rebates might be based on income requirements, which are based on adjusted gross income (AGI).

    AGI is simply your total gross income (earnings before tax or other deductions) minus specific deductions.

    Generally, the more deductions and credits you take, the lower your taxable income.

  • Jennifer Korn

    What is the CTC income cap?

    Single parents or parents who file their taxes as single qualified for the full expanded child tax credit checks if they made $75,000 or less.

    If you make more than $75,000, the monthly check was reduced by $50 for every $1,000 over the cap and eventually phases out completely.

  • Expanded CTC would cover costs of inflation

    The letter also cited an open letter published in April by 133 economists, who argued that the expanded child tax credit is a logical answer to help families fight inflation.

    “The expanded Child Tax Credit is one of the easiest, most
    effective, and direct tools currently at our disposal to help families deal with the impact of inflation on family budgets.”

    While the economists did not strongly call for action like the civil and racial justice groups did, all agreed that the expanded CTC would make an “important difference” for families on a budget without contributing to an increase in inflation.

  • 50 civil rights groups ask Congress to expand CTC

    On Monday, June 6, a group of 50 civil rights organizations including the NAACP and the National Urban League sent a letter to Senate Majority Leader Chuck Schumer, imploring him to extend the expanded child tax credit.

    Citing data showing the expanded CTC contributed to declining poverty and higher quality of life, the groups called for an immediate reinstatement of the $3,600 credit.

    “Poverty is a policy choice. Allowing millions of children, including more than 2.5 million Black and Latino children, to fall back into poverty is also a political choice,” the groups wrote.

  • When was the deadline for 2022 payments?

    The IRS gave Congress until December 28, 2021, to pass its package to ensure that expanded child tax credit payments that could be scheduled for 2022 starting on January 15 would be sent out on time.

    President Joe Biden previously called to extend the child tax credit payments until at least 2025.

    The enhanced payments have not been approved.

  • Opting out of CTC, continued

    Opting out is also a smart decision for parents who are concerned the IRS might send an overpayment based on old tax information, and who don’t want to worry about paying any of that money back.

    This would be the case if household income went up or if a dependent aged out of an age bracket before the end of 2021.

  • When to opt out

    Opting out is recommended for those who know their household’s circumstances or tax situation will change and want to avoid updating the account information in the IRS portal.

    This could be the case for separated, divorced, or unwed parents who alternate custody of a child.