It is pretty well-known that the Child Tax Credit has gone through quite a few changes since it was conceived in 1997. At that point, the eligible taxpayers were only capable of claiming a sum of $400 per child.
This credit was considered to be a way for the government to help in fighting childhood poverty- yet the restrictions for claiming the credit saw to it that only a minute few could access it in the first place. This proposal saw a massive change in 2021 when the American Rescue Plan supercharged on this credit- and ended up doubling the refundable amount for certain children. Interestingly, the whole credit was deemed fully refundable, which implied that those with no earned income were also considered eligible.
Child Tax Credit Has Gone Through Multiple Changes
In 2023, the Child Tax Credit amount is smaller, and the eligibility seems to be far more restricted than it was in 2021. This is a result of the rules that were established through the Tax Cuts and Jobs Act of 2017. These changes will be implemented through the fiscal year of 2025- if Congress doesn’t end up modifying the credit before this takes place. Back in 2021, the ARP had made quite a few changes to the credit for a single year that helped most families by allowing them to receive part of the credit over six months- rather than an entire lump sum when they end up filing their taxes.
Taxpayers with children who are eligible in 2022 would be able to claim a Child Tax Credit worth up to $2,000 per child. This year, the credit seems to be partially refundable- and there is also an earnings threshold to start claiming the up to $1,500 portion called the “Additional Child Tax Credit.”