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Be Aware That These Tax Breaks Are Changing for Filing Taxes in 2022

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Many increased advantages of the American Rescue Plan are no longer available for the tax year 2022 (to be filed in spring 2023), resulting in significant changes to tax deductions.

TurboTax reminds filers that certain credits, such as the Child Tax Credit and Earned Income Tax Credit, will be reverted or retired for filing purposes. Here’s a rundown.

Child Tax Credit

2021 rules are being phased out.

  • Credit for each dependent kid under the age of six: up to $3,600
  • The credit of up to $3,000 per dependant child aged 6 to 17.
  • Child dependents under the age of 17 may be claimed.
  • Filers were entitled to the full benefit if their income was less than $150,000 (married filing jointly), $75,000 (single), or $112,500 (married filing separately) (head of household)
  • Even if you did not owe income taxes, you were eligible for the full credit, indicating that the benefit was “completely refundable.”

The following are the filing rules for 2022:

  • The dependent child must be under the age of 17.
  • The credit of up to $2,000 per dependent kid
  • Filers are entitled to full credits if their income is up to $400,000 (married filing jointly) or $200,000 (filing separately) (single or head of household)
  • You can only receive up to $1,400 if you don’t owe anything.

Read More:

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The Biden Administration Has Reactivated the Child Tax Credit Portal!

Credit for Child and Dependent Care

2021 rules are being phased out.

  • Filers may be eligible for a 50% credit on up to $8,000 in care expenses for one child under the age of 13 or an incapacitated spouse or parent. Alternatively, taxpayers may be eligible for a 50% credit on up to $16,000 in care expenses for two or more dependents.
  • Even if you didn’t owe taxes, you could get a refundable credit if you lived in the United States for more than half the year.
  • If your AGI was more than $125,000, your credit amount was reduced.

The following are the filing rules for 2022:

  • Filers may be eligible for a 35% credit on up to $3,000 in childcare expenses for one kid under the age of 13 or an impaired spouse or parent. Alternatively, taxpayers may be eligible for a 35% credit on up to $6,000 in care expenses for two or more dependents.
  • If your AGI exceeds $15,000, your credit amount will be reduced.

Also Read:

The Federal Income Tax Rates and Brackets for 2023 Are Shown Below

Update on the Child Tax Credit: Thousands of People May Be Eligible for $1,000 in Credits!

Earned Income Tax Credit (EITC)

2021 rules are being phased out.

  • Filers who did not have children were eligible.
  • Taxpayers without children over the age of 65 or between the ages of 19 and 25 were eligible.
  • For taxpayers with three or more children, the EITC payment could reach $6,728.

The following are the filing rules for 2022:

  • Filers without children must be at least 25 years old and under the age of 65 to be eligible.
  • Income from the previous year cannot be utilized to help you qualify for ETIC.
  • The EITC amount has been increased to $6,935 for filers with three or more children.

TurboTax also states that the Recovery Rebate Credit (for those who did not receive a third stimulus payment) and the Self-Employed Sick and Family Leave credits will no longer be available for the tax year 2022.

Visit the Internal Revenue Service for more information on 2022 file year credits and deductions. The deadline to file taxes for 2022 is Tuesday, April 18, 2023.

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