What's known about the Child Tax Credit and Tax Refund in 2023

USA Diario

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The cost of living crisis right now in the United States is among the most shocking news for ordinary citizens in recent years. Let's just say that its effect stems from the confinement measures adopted in the wake of COVID-19, which led to growing shortages.

This unfortunate situation caused prices of basic commodities as well as food and other basic necessities to rise. For this reason, U.S. residents are now trying to save as much as they can to mitigate the storm that is gripping the country.

As if that were not enough, the price of gasoline has also skyrocketed, reaching levels never before seen in the nation. All this caused by Russia's invasion of Ukraine, including its sanctions on imports of Russian oil itself.

Against this backdrop, the Federal Reserve intervened in the resulting inflation and raised interest rates to curb the skyrocketing inflation rate.

Arguably, this measure has had some effect, as gasoline prices have come down. However, borrowing has become more expensive and the country could be on the verge of a recession.

Fortunately, however, it is not all bad news, as there are certain aid programs that help to alleviate the situation. Such is the case of the Child Tax Credit (CTC), a government scheme that entitles you to a certain tax exemption if you have children.

What should you know about this program?

To be eligible, there are two main criteria: the first is that you must have an income of less than $200,000 USD. But, if you are filing with a partner and children under 17, your income must be less than $400,000 USD.

For 2023 there is a maximum you can earn under the CTC scheme, and that is $2000.00 USD; furthermore, up to $1540.00 USD is refundable.

However, if your income is less than $43,492.00 USD you may be eligible for a tax refund of up to $3733.00 USD. This would be the amount if you file alone, but if you file with a partner the amount would be $49,622.00 USD.

If you adopt a child, you can receive up to $14,890.00 USD in adoption-related expenses. To do so, you must have an income of less than $263,410.00 USD per year.

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