New 2022 program worth $4,000 per child available after CTC payments end
ALTHOUGH monthly child tax credit payments for 2021 have ended, a new program could provide families with $4,000 per child.
The funds are part of a lesser-known federal program that could help put money back in the pockets of those paying for child care.
The child care and dependent care credit is available to taxpayers who paid child care expenses while working or looking for work.
“The amount of the credit is a percentage of the amount of work-related expenses you paid to a healthcare provider for the care of an eligible person,” the IRS website states.
The credit can be claimed when filing a 2021 tax return.
For the first time, the credit is fully refundable. This means that there is no minimum income threshold to qualify for the credit.
For 2021, the total expenses that can be used to calculate the credit must not exceed $8,000 for one qualifying individual or $16,000 for two or more individuals.
Who is eligible for the credit?
While there is no minimum income threshold to qualify for the child and dependent care credit, there are other criteria that must be met.
To claim the credit, a child or dependent must be one of the following:
- An eligible dependent child under the age of 13 at the time of pick-up
- A spouse who has a physical or mental disability and who has lived with the applicant for at least half the year
- A person who has a physical or mental impairment and who is either: a dependant; a person who could have been a dependent, except they received a gross income of $4,300 or more and therefore did not qualify
Generally, those who file their taxes under married separate filing status are not eligible for the credit.
However, there are certain exceptions for taxpayers living separately from their spouse if other conditions are met, according to the IRS.
Read our Child Tax Credit live blog for the latest news and updates…
All criteria and requirements can be found on the IRS website.
How do I report the credit on my tax return?
If you qualify for the credit, you must complete certain forms and attach them to your 2021 tax return.
First, you must complete Form 2441, Child Care and Dependent Care Expenses. This must be attached to one of the following, depending on your situation:
- Form 1040, United States Personal Income Tax Return
- Form 1040-SR, U.S. Income Tax Return for Seniors
- Form 1040-NR, Non-Resident Alien Income Tax Return
The IRS offers an online interview process to help taxpayers determine if they are eligible to receive the credit.
You will need certain documents, including your tax status and the date of birth of the child or dependent who received care.
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