Why do I not qualify for child tax credit? I'm self employed and made $2600 last year.

[shannonkay12345]

I have a 3-year-old of my own. And gained guardianship of my 12-year-old sister after she became an orphan.

It was a very rough year financially. I was on state assistance, and gained child support for the 3-year-old but managed to get off and pull together some self-employment again by the end of the year. The 12-year-old doesn't have any funds from her parents' dying or state assistance. I'm doing this all on my own.

I don't understand why I don't qualify for the child tax credits.

[xmasbaby0]

Sorry to be blunt, but you did not make enough money.

The tax laws changed for child-related credits and are much less generous for 2022.

Make sure you have entered your child as a dependent in My Info, and that you have entered the child's Social Security number.    Careful— do not say that your child’s SSN is not valid for employment.  If your child was born in 2022 make sure you said he lived with you the whole year.  There is an oddly worded question that asks if the child paid over half their own support.  Say NO to that question.

Have you entered income from working in 2022?  If not,  you will not receive an income tax refund based on having dependent children.

The rules for getting the child tax credit on a 2021 tax return and now on a 2022 return are very different.  For 2021 you could get $3600 for a child under 6 or $3000 for a child between 6 and 17 even if you had no income/did not work.   That is NOT the way it will work for your 2022 tax return.  The “old” rules are back.   The maximum amount of the child tax credit is now $2000 per child; the refundable “additional child tax credit” amount is $1500.   In order to get that credit, you have to have income from working.  The credit is calculated based on the amount you earned above $2500 multiplied by 15%, up to the full $1500 per child.  If your child is older than 16 at the end of 2022, you do not get the CTC.  But you may still get the non-refundable $500 credit for other dependents instead.

https://ttlc.intuit.com/questions/1900923-what-is-the-child-tax-credit

https://www.irs.gov/help/ita/does-my-childdependent-qualify-for-the-child-tax-credit-or-the-credit-f...

And for the Earned Income Credit—-the rules are back to the “old” rules—

Those under 25 and over 65 without children are not eligible as they were uniquely in 2021.   And you cannot use your income from any earlier tax year to get the EIC for a 2022 return.  There is no “lookback” for 2022.  EIC for 2022 will be based on the income you earned by working in 2022.

https://ttlc.intuit.com/questions/1899157-what-are-the-qualifications-for-the-earned-income-credit-e...

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant

Look at your 2022 Form 1040 to see the child-related credits you received

PREVIEW 1040

https://ttlc.intuit.com/questions/1901539-how-do-i-preview-my-turbotax-online-return-before-filing

Child Tax Credit line 19

Credit for Other Dependents line 19

Earned Income Credit line 27

Additional Child Tax Credit line 28

[VolvoGirl]

Was your Net Profit on schedule C for self employment 2,600 or was that the gross?  Either way if that was your only income you do not owe any regular income tax on it so there is no tax for the Child Credit to reduce.   But you will still owe self employment tax on it.  

[Hal_Al]

The child tax credit  (CTC) is  limited to your tax liability. The CTC is a non-refundable credit and can only reduce your income tax to 0, It can not help you beyond eliminating your tax liability. But, if you have more than $2500 of earned income, some or all of it is usually given back to you thru the "Additional Child tax credit". That is, part of the CTC may be on line 28 of form 1040 (2021 & 2022) instead of line 19. The  ACTC is calculated on form 8812 and  is basically 15% of your  earned income (net if from self employment) over $2500. The ACTC is a maximum of $1500 per child (not $2000).