Why was the child tax credit reduced from $3600 to $2000 for my 2-year-old this tax year?

So confused about my taxes this year! Last year when I filed, I got a child tax credit of $3600 for my daughter who just turned 2. I was counting on that same amount for this filing season, but when I started doing my taxes yesterday, it's showing I'm only eligible for $2000? What happened? Did the rules change? My income hasn't changed much (maybe went up like 3% from last year). I'm a single parent and that $1600 difference is really significant for my budget. I was planning to use that money for daycare expenses this summer. Is this happening to everyone or did I mess something up in my filing? Using the same tax software as last year. Anyone know if there's some additional form I need to fill out to get the full amount again?

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17 comments

Edison Estevez

•8M

The difference you're seeing is completely normal and not an error on your part. The $3600 child tax credit was part of the American Rescue Plan Act, which temporarily expanded the credit for the 2021 tax year only. That expansion expired, and the credit reverted back to the standard $2000 per qualifying child. The expanded credit was a COVID relief measure that wasn't extended, so everyone is experiencing this same reduction - you didn't do anything wrong in your filing. The current $2000 credit remains partially refundable up to $1,400 per qualifying child, meaning you can receive that amount even if it exceeds your tax liability.

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Edison Estevez

•8M

No, the increase wasn't permanent - it was specifically designed as temporary pandemic relief. There have been proposals to extend the expanded credit, but nothing has passed Congress yet. Regarding refundability, if you don't owe any income tax, you can still receive up to $1,400 of the $2000 credit as a refund. The remaining $600 is non-refundable, meaning it can only be used to offset taxes you actually owe. This is different from 2021 when the entire $3,600 was fully refundable. There's also an earned income requirement to receive the refundable portion, so you need to have earned at least $2,500 from work to qualify for that part.

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James Johnson

•8M

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