The Advance Child Tax Credit Payments were one of the most important tax provisions of 2021. These payments helped millions of families weather the economic impact of the COVID-19 pandemic. But what does it all mean for your 2022 tax return? Keep reading to learn more.
Advance Child Tax Credit Payments and your 2022 Tax Return
In short, the Advance Child Tax Credit Payments were monthly payments that American families received throughout 2021 (the last payment is scheduled to go out on December 15, 2021) as a form of financial relief.
Families received $300 per month for every child under the age of six and $250 per month for every child between the ages of six and 17. Now, what does this all mean for your 2022 tax return?
First, remember that these payments were technically a 50% cash advance on the child tax credit you were expected to qualify for on your 2022 return. This means that there are two basic scenarios:
- You received less than the amount you were eligible for.
- You received more that you were eligible for.
If you received LESS money than you were supposed to, you will be able to claim a credit for the remaining amount on your 2022 tax return.
On the other hand, if you received MORE than you were eligible for, you may need to repay a part of all the extra money when you file your taxes next year.
In January 2022, the IRS will send you a letter that states the total amount of Advance Child Tax Credit Payments you received in 2021. Make sure to keep this letter, along with any other letter about your Child Tax Credit.
If you need assistance with your Child Tax Credit or with your 2022 Tax return, get in touch with JT Taxes. Our team stands ready to answer your questions and offer the dependable, friendly assistance you need.
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Do you need assistance with personal or business taxes? JT Tax Services is here to help! We give you the peace of mind that comes with knowing that you are limiting your liability while staying compliant with all regulations.
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