Are "Child and Other Dependent Tax Credits and Earned Income Credit" smaller this year?

[txkpt]

Hello I'm a novice and just want to make sure because last year I had a pretty size refund but this year my "Child and Other Dependent Tax Credits" is $0 and my "Earned Income Credit (EIC)" is only $410 for 2 child.  Thank you so much.

[xmasbaby0 · Accepted solution]

The childcare credit is less for 2022.   It is non-refundable----so it is not added to your refund.  It can only reduce the tax you owe.

And EIC is different too.

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

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...

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

[PattiF]

There were changes to the Child and Other Dependent Tax Credits and the Earned Income Tax Credit that caused your refund to be much smaller. 

Please see this TurboTax Help article for more information.

[txkpt]

thank you for great explanation.   I still need to review this because I'm getting too small of a refund.  I did check my w2 and evertything.   I also deleted my self employment and it seemed to bumped up the refund amount to a couple hundreds $.  Strange. 

[hwdenby]

Why was my refund so much smaller

[DMarkM1]

There are many events that may reduce your refund, including: 

• Starting an additional job 
• Getting a significant raise, but withholding did not adjust
• A change in filing status
• Having your child age out of the child tax credit 
• Finishing school, so no longer eligible for education credits
• A change in earned income that affected the earned income tax credit

You best source of answers as to what changed in your situation is your tax return forms.  Print last year's and this year's returns and compare line-by-line to see where the differences are. 

Here is a link with additional information on refund changes year over year.