Many parents relied on Child Tax Credit Payments to boost their income through the long ongoing struggle of the pandemic. However, things are changing a bit as we move into 2022. Parents should know about taxes if they received the credits last year. And many parents want to know if these payments will continue.
What Are Child Tax Credit Payments?
This is a specific part of the America Rescue Plan designed to help people stay afloat despite current economic challenges. Through this program, income-eligible people have been able to receive tax credits for their children in the form of monthly payments. Under this program, people who earn up t $112,500 as single parents or $150,000 as a couple can receive between $3000 and $3600 total per child, annually, disbursed in monthly payments. If you meet those qualifications and filed taxes in 2019 and/0r 2020 then you should have received your payments over the past six months.
Will Child Tax Credit Payments Continue in 2022?
President Biden wants to continue the child tax credit payments in 2022. In fact, he wants to try to make those payments last for years to come, all the way through 2025. However, Congress had to vote to extend the payments past 2021. That didn’t happen. Therefore, child tax credit payments will NOT continue in 2022. Many people are concerned about how parents will struggle in the face of this change.
One More Payment Coming in April 2022
The payments won’t continue in 2022 for the new year. However, parents might receive one more big payment in April 2022 as part of last year’s plan. You see, monthly payments started arriving halfway through the year. However, that was with the plan to make one big lump sum payment for the first part of the year at the April 2022 tax filing time. So, if you’ve received child tax credit payments in 2021, then chances are that you’re going to get that check in April 2022. And if you didn’t receive it, but you did qualify for it, then you could be eligible to get the entire 2021 year’s credit when you file those taxes.
Remember, It’s a Tax Credit
This isn’t just free money given to people with children. It’s a tax credit. People who received the money essentially received an advance on that credit before taxes were due to be filed. For most people, this simply means that when you file your 2021 taxes, you’ll count that credit as already received.
However, in some instances, you might discover that you were overpaid. If that happens, then you might owe the IRS money come tax time for the extra amount that you received in Child Tax Credit Payments. What could cause that? If your 2021 income was higher than in previous years, and therefore exceeds the minimums outlined above, then you might have to pay back that money. If not, then you probably don’t have to worry about it.
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