What was Publication 972: Child Tax Credit?
The Internal Revenue Service (IRS) put out Publication 972, which explained how to determine the exact amount of the child tax credit a person can claim.
People used it to learn about the child tax credit for tax years before 2020. You won’t need to use Publication 972 to figure out your child tax credit or the credit for other dependents after tax year 2021. Instead, you should use Form 1040 along with Schedule 8812.
There was an update on any changes to the tax credit for the year in the document, as well as a worksheet to help taxpayers figure out their child credits in some unusual situations and directions on how to figure out which child tax credit to claim.
How to Read Publication 972: Child Tax Credit
The child tax credit can help most parents, foster parents, and guardians of kids younger than 17 lower their annual taxed income. Form 1040 or 1040NR can be used to claim this benefit.
Who can apply?
In tax years before 2020, IRS Publication 972 was used to see if a child was qualified. The paper says that a child or dependent who meets the requirements must have been
not yet 17 years old at the end of the tax year;
claim them as dependents on their federal tax return;
someone who is a citizen, resident alien, or national of the United States—IRS Publication 519 has more information on residency standards;
spent more than half of the tax year with the individual and
Not given more than half of their own money to help out.
Amount of Credit
Publication 972 also wrote about how much credit a worker can get. For eligible children, the most that could be asked for in the 2020 tax year was $2,000.1Since. Since 2018, when the IRS doubled the $1,000 credit for 2017 tax returns, that cap has been in place.
There is a form in IRS Publication 972 that can determine how much of a child tax credit can be claimed.
Cash Back
There was also information in Publication 972 on how to get some of your wasted credit back. The refundable part of the child tax credit, the extra child tax credit (ACTC), went up from $1,000 to $1,400 after changes to the law in 2017. This meant that low-income people whose tax credits were higher than their tax bills could get up to $1,400 back.
Families earning over $2,500 a year can use the ACTC to ask the IRS for a return. 7 filers must fill out Schedule 8812 to ask for a return.
Unique Things to Think About
There are boundaries to the child tax credit, and people with certain high incomes can’t get it.
This tax benefit stopped being given to people with an adjusted gross income (AGI) of $200,000 or $400,000 if they were married and filed jointly in 2020.
Conclusion
- People in the United States used Publication 972 to figure out the Child Tax Credit, one of the most famous tax credits.
- From the 2021 tax year on, the form can’t be used anymore.
- There are limits on how much money you can make and still get credit.
