Child tax credit: Why is your 2022 tax refund smaller?

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The child tax credit you got throughout last year could reduce your tax refund when you file this spring.

What is happening: Many parents who received child tax credit payments throughout 2021 will likely see a smaller tax refund this spring, per CNN.

  • Nearly 36 million families have received half the Child Tax Credit – up to $300 per month for those with children 6 and under and $250 per month for families with children 6 to 17 years – in monthly installments from July to December.
  • Parents can claim the other half of the tax credit on their 2021 tax returns, per Business Insider.
  • This is the first time that credit has been granted on a monthly basis. So basically families got half of their credit earlier than normal.

What they say : “One thing that’s likely to happen is people will get lower refunds than they expected because that refund, in a sense, came ahead of time,” said Barbara Weltman, editor. of “JK Lasser’s Your Income Tax 2022”, at CNN.

What there is to know: You may have to repay some of the child tax credit, which I’ve already written about for the Deseret News.

Specifically, the IRS used the 2020 information to determine who got the tax credit, according to CNBC. If this information has changed throughout 2021, you may owe money.

  • “It would reduce your refund or increase your tax payment next April,” April Walker, senior tax practice and ethics manager at the American Institute of Certified Public Accountants, told CNBC. “That’s how he would be reimbursed.”
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