Why my Child and Other Dependent Tax Credits were $4,000 in 2022, and only $1,000 this year? I have two children (5 and 12)

[xmasbaby0]

Did one of the children turn 17 in 2023?  You lose the CTC in the tax year in which a child turns 17, and instead you get the $500 credit for other dependents.

or....did you earn less in 2023?  The refundable "additional child tax credit" is based on how much you earned by working.

The 2021 child-related credits were very generous.  Lots of people are still being taken by surprise when they find out the credits for 2022 and 2023  are lower than they were for 2021.

The tax laws changed for child-related credits and are much less generous for 2022 and 2023.

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 2023 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 2023?  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 2023 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 2023 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 $1600.   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 $1600 per child. If the amount you earned was too low, you will not get the full $1600.

 If your child is older than 16 at the end of 2023, 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://ttlc.intuit.com/turbotax-support/en-us/help-article/taxation/additional-child-tax-credit/L6x...

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 2023.  EIC for 2023 will be based on the income you earned by working in 2023.

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 2023 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

[Vanessa A]

Did you have less income this year than last  year?    A change in income would affect your child tax credit.  

The nonrefundable  Child Tax Credit  will lower your tax liability down to $0 but not result in a refund.  So if your tax liability on line 18 is $1,300, you would only be eligible for $1,300 of the Child Tax Credit.

After that, if you did not use it all up, you may still be able to get the Additional Child Tax Credit.  This will not be more than 15% of your Earned income minus $2,500.  So, if your Earned Income is $10,000, your Additional Child Tax Credit would not be more than $1,125.

You can look at line 28 of your 1040 to see if you received the Additional Child Tax Credit. 

To see your 1040 select the following:

• Tools
• Tax Tools
• View Tax Summary
• Preview My 1040

You should also check your dependents to be sure they all qualify for the Child Tax Credit.  You can see this by looking at the Dependents section of your 1040 and seeing if there is a check mark by their name under the Child Tax Credit column.