2023 Tax Changes Part 2
Welcome back to Money Burst. This is video number two in our four-part series talking about some of the changes coming to the 2023 tax season.
Today I want to focus on the child tax credit. In July of 2021 the child tax credit was expanded as part of the American Rescue Plan Act. What changes were implemented, were basically a big increase to the overall credit. It went from a max of two thousand dollars, up to three thousand dollars, per dependent between the ages of 6 and 17.
Additionally, it created a new age range for dependents five years old and younger. For each of these individuals you would receive thirty-six hundred dollars. And, instead of receiving all of this as one big refund when you file your taxes, you have the option to have up to half of it paid out in monthly payments. These payments range from about $250 to $300 per month.
One additional change that we saw to this credit was that it also became fully refundable before 2021. The refundable portion was known as the additional child tax credit and it was limited to a max of fourteen hundred dollars per child.
All of these changes expired on December 31st of 2021, so that meant on January 1, 2022 all those changes reverted back to their original status, meaning that the child tax credit was now capped at two thousand dollars per child, under the age of 17.
So, these are just some changes to be on the lookout for. It may explain why your tax refund looks a little bit different and also why you were no longer receiving those monthly payments.