In 2021, the Biden Administration made a major overhaul to the child tax credit for American taxpayers.
The credit was expanded from $2,000 to as much as $3,600 for those with kids ages 5 and under, and $3,000 for kids ages 6 and over.
In addition, parents were able to collect the first half of their child tax credit in advance.
These payments were sent from July of 2021 through Dec. of 2021.
This dropped millions of children back into poverty, and now states and some federal lawmakers are trying to bolster it again.
What will the child tax creit look like this year?
This year, the credit has reverted to the way it was before.
This means it’s a refundable credit worth $2,000.
Income thresholds are $200,000 for single or head of household filers and $400,000 for married filing jointly.
The credit will phase out by $50 for every $1,000 made past the limit.
Biden wanted to extend the expansion until 2025, but it failed to pass.
There are currently ten states offering state level child tax credits
State rules differ from each other, but there is some form of CTC.
- New Mexico
- New York
North Carolina offers a deduction instead of a credit, and Michigan recently passed a child tax credit worth $500 per child.
Connecticut created one that pays $250 per child, with a limit of 3 children, or $750.