Don't want to read? Watch this tiktok video:
After all the changes to the tax code due to the pandemic, this year some tax things have changed back to the way they were back in 2020. For most people the biggest changes happened to the tax credits. Three things to remember: 1) There is no stimulus check payments for 2022; 2) The Child Tax Credit has been reduced and requires earned income; and 3) The Child and Dependent Care credit is no longer refundable.
No Stimulus Payment for 2022
For 2022 there has been no stimulus payment and there is not an option to claim any stimulus payment on the tax return.
In both 2021 and 2020 the government provided stimulus payments. For those that did not receive the payment directly they were able to request the payment on their tax return. If you had a social security number in either 2020 or 2021 and did not receive the stimulus payments, you can find out how to claim them here: https://www.irs.gov/newsroom/recovery-rebate-credit
The Child Tax Credit smaller and requires Earned Income
The 2022 Child Tax Credit will be calculated differently from last year’s credit. The Child Tax Credit is now worth $2,000 with only $1,500 refundable (able to be returned directly as cash to you). Unlike last year, this year you will need to have earned income (money from working) to take advantage of this credit. This means that if you did not work at all during 2022 you will not be able to get the Child Tax Credit.
If you got the Child Tax Credit last year, you may notice a decrease when you compare your refund from last year.
The Child and Dependent Care Credit is no longer refundable
The last big change is that the Child and Dependent Care Credit is changing back to its old calculation, which means that you will need to owe taxes to actually be able to benefit from it. It is a non-refundable credit, which means it never comes back to you as cash in your refund and instead only decreases the amount of taxes you owe. The tldr here is that if you make very little income, this credit won’t be able to help you this year.