The American Rescue Plan, which was passed in 2021, included an expanded child tax credit for families. This allowed eligible parents or guardians to receive a tax credit of $3,600 for children 5 and under and $3,000 for children ages 6 to 17, compared to the previous $2,000 per child. Additionally, part of the increased credit was distributed on a monthly basis in advance of tax season, providing families with extra financial support.
However, the expanded child tax credit is no longer in effect for the 2023 tax year. The American Rescue Plan only expanded the credit for the 2021 tax year, meaning it has now returned to its pre-pandemic amount of $2,000 per eligible child. This change means that parents or guardians will likely see a smaller refund when they file their 2023 tax return compared to last year.
READ ALSO: Huge Changes in 2023: How Much Child Tax Credit Can Parents Expect This Year’s Tax Season
To claim the $2,000 child tax credit, families can do so when filing their 2022 tax return. It’s important to note that only up to $1,500 of the credit is refundable, according to TurboTax. This means that if you don’t owe any taxes, you can only receive a maximum of $1,500 back as a refund. In comparison, the increased credit under the American Rescue Plan was fully refundable.
Overall, while the expanded child tax credit provided much-needed financial support to families in 2021, it’s no longer available in 2023. However, the original child tax credit of $2,000 per eligible child is still available and can help reduce any taxes owed or increase a family’s tax refund.
READ ALSO: Child Tax Credit Returns, Recipients Should Expect for Some Changes
