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Refund Per Child

how much tax refund per child

How Much Per Child: Smiling girl with her mother

WHAT ARE MY OPTIONS?

available tax credits and how to qualify

“How Much Tax Refund Per Child?”, this question starts as early as November each year.
 
We realize that as the holidays approach, not only are people eagerly awaiting the holiday season, but they are also looking forward to “Tax Refund Season” (aka “Tax Money Time”). Tax Money Time is the time of year many people count on to get caught up on their bills after the holidays.
 
So, to answer the question, “How Much Tax Refund Per Child?”, our quick answer would be “It depends.” It depends on how much earned income you had during the year. And it depends on how many children you will claim on your tax return.
 
Here is a list of tax credits related to children that generate this question:
Smiling son with father during breakfast

Earned Income Credit is a tax credit for low to moderate-income families who work.

The EIC credit is calculated based on your family’s earned income, how many qualifying children you have, and your filing status. Each qualifying child up to 3 increases the amount of the EIC you are eligible for.

So, you may be asking “How much for one child?” or “How much do you get back per child?”

This amount changes yearly, and there is a sweet spot for your earned income limits that allows you to claim the full credit.

The amount ranges from roughly $21,000 to $59,000 for married filing joint and $16,000 to $53,000 for all other filling statuses, and depending on the number of children claimed the credit goes up by totally different amounts.

To qualify for the maximum annual credit you need to not exceed the particular income limitation for that specific year.

How much refund per child in 2023

The maximum credit amounts in 2023:

  • No qualifying children: $600
  • 1 qualifying child: $3,995
  • 2 qualifying children: $6,604
  • 3 or more qualifying children: $7,430

The maximum credit amounts in 2022:

  • No qualifying children: $560
  • 1 qualifying child: $3,733
  • 2 qualifying children: $6,164
  • 3 or more qualifying children: $6,935

The maximum credit amounts in 2021:

  • No qualifying children: $1,502
  • 1 qualifying child: $3,618
  • 2 qualifying children: $5,980
  • 3 or more qualifying children: $6,728

The maximum credit amounts in 2020:

  • No qualifying children: $538
  • 1 qualifying child: $3,584
  • 2 qualifying children: $5,920
  • 3 or more qualifying children: $6,660

EIC is refundable, which means that even if you do not pay any taxes in during the year (i.e. zero) and you qualify for EIC, you can still get a big refund. In other words, you can get more back than you paid in. Lastly be careful about not filling jointly if you are married it can cause issues with trying to claim the EIC.

For further information please use the EITC tables provided by the IRS.

In 2021 there were a lot of changes made to the child tax credit (CTC) starting with the amount being raised and removing the earned income requirement.

In tax year 2022 things will go back to the old method where the full child tax credit per child is $2,000 and there is an earned income requirement that will award the credit on a gradual scale based on the amount of earned income.

American Opportunity Tax Credit (AOTC)

Classroom full of diverse students ready to learn and have fun

The American opportunity tax credit (AOTC) is a up to $2,500 per year credit for qualified education expenses paid for an eligible student during the first four years of higher education.

If the credit brings your total tax liability owed to 0, you can have 40 percent of any remaining amount of the credit (up to $1,000) refunded back to you.

The amount of the credit is 100 percent of the first $2,000 of qualified education expenses you paid for each eligible student and 25 percent of the next $2,000 of qualified education expenses you paid for that student, the credit can be claimed a total of 4 times.

The education expenses and related expenses for the qualifying student must be paid to an eligible educational institution or for some other recognized education credential.

In order to claim AOTC you’ll be provided a type of tuition statement called a 1098-T, bring that when you come in to file your taxes as well as your education expenses.

To qualify for the AOC, the student must:

  • Be enrolled in a degree or other recognized education credential program.
  • Enroll in at least half-time status for one academic period* during the tax year.
  • Haven’t completed the first four years of higher education by the beginning of tax season.
  • You cannot have claimed the AOTC or the former Hope credit for more than four tax years.
  • Have no felony drug conviction by the end of the tax year

 

*Academic Periods may be semesters, trimesters, quarters or any other interval of study such as a summer school session. The academic periods are set by the schools. For schools that use clock or credit hours and do not operate on an academic term schedule, the payment period will suffice as an academic period.

What are the income limitations for AOTC?

  • If your MAGI is over $90,000 ($180,000 for joint filers), you are ineligible for the credit.
  • You can only claim the full credit if your modified adjusted gross income is $80,000 or less ($160,000 or less for married filing jointly).
  • If your MAGI is over $80,000 but less than $90,000 (or over $160,000 but less than $180,00 if filing jointly), you will receive a reduced amount of the credit.

Lifetime Learning Credit (LLC)

  • For people who have exhausted their AOTC and are seeking other tax credits slightly different tax credit the lifetime learning credit (LLC) is a smaller maximum credit of $2,000 that can be claimed as many years as you are in school great for people seeking graduate degrees.

Child And Dependent Care Expenses

Mother taking care of her daughter and son

The child and dependent care credit is a tax credit that may help you pay for the cost of raising children and other dependents (qualifying persons). 

The credit is calculated based on your income and a percentage of expenses that you incur for the care of qualifying persons to enable you to go to work, look for work, or attend school. 

For 2021, the credit up to $4,000 for one qualifying person and $8,000 for two or more qualifying persons) and potentially refundable, so you might not have to owe taxes to claim the credit (so long as you meet the other requirements). 

This means that more taxpayers will be eligible for the credit for the first time and that, for many taxpayers, the amount of the credit will be larger than in prior years.

Economic Impact Payments (EIP / Stimulus Check)

Finally, if you never got your stimulus then you still have time to apply for it so long as you claim it on your tax return for tax years 2020 and 2021 if you already filled then you can file an amendment with tax form 1040-X to claim additional tax benefits. These EIPs can be claimed for any children or adults on the tax return who have yet to receive them.

Easy Advance*

Beginning in January, you can get an instant tax refund advance up to $6,000 at M & M Tax Service.

Yes that’s right; tax refund loans are available this year!

With the IRS announcing they will be holding tax refunds of early tax return filers who have children until February 15th or later, you may need this money now.

Many times we see people that count on their early season tax refund check to catch them up on their bills after the holidays. Learn more about our Easy Advance*.

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* To be eligible for the $6,000 loan amount, your expected Federal refund less authorized fees must be at least $7,000. An Easy Advance (EA) is a loan secured by and paid back with your tax refund and is offered by Republic Bank & Trust Company, Member FDIC, to eligible taxpayers. Loan amount options are based on your expected Federal refund less authorized fees. If approved for an EA, a Finance Charge will apply. Loan is subject to underwriting and approval. EA proceeds are typically available within 24 hours of IRS acceptance of tax return or within 24 hours for those filing before the IRS start date; however, if direct deposit is selected, it may take additional time for your financial institution to post the funds to your account. Visit your tax preparer to learn about the cost and timing of all filing and product options. Available with preparation of 2022 federal tax return through Feb. 28, 2023.

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