If you’re like many parents, you may have noticed that your child tax credit was lower this month. Here’s why that may be the case.
Checkout this video:
Reasons for a Lower Child Tax Credit
If you received less child tax credit this month, there could be a few reasons why. The most common reason is that your income has changed. Maybe you started a new job or got a raise, which means you now make more money and don’t qualify for the credit. Another reason could be that the number of children you have changed. If you have more children, you may not receive as much money.
You Had a Change in Income
If you or your spouse lost a job or had a decrease in income, that could explain the reduction in your child tax credit. The CTC is based on your earned income, so if that amount decreases, so will the amount of your credit.
You Had a Change in Family Status
If you had a change in your family status this year, that could be the reason your child tax credit is lower. For example, if you got married or divorced, had a baby, or adopted a child, that could impact the amount of credit you’re eligible for.
You Had a Change in the Number of Children in Your Household
If you have more than one child, you may have noticed that the amount of your child tax credit changes from month to month. The reason for this is that the credit is based on the number of children in your household.
If you have one child, you will receive a tax credit of $1,000 per child. If you have two children, you will receive a tax credit of $2,000 per child. If you have three children, you will receive a tax credit of $3,000 per child.
The maximum credit you can receive is $3,000 per child. So if you have four or more children, your total tax credit will be capped at $3,000.
How to Respond to a Lower Child Tax Credit
If you’re puzzled by a lower child tax credit, don’t worry-it happens to the best of us. The good news is that there are a few things you can do to respond to a lower child tax credit. In this article, we’ll go over a few things you can do to get to the bottom of your lower child tax credit.
Check for Inaccuracies
If you notice that your child tax credit has decreased, the first step is to check for inaccuracies. The IRS may have made a mistake when processing your return, or your financial situation may have changed since you filed.
If you find an error, you can file an amended return using Form 1040X. Be sure to include any supporting documentation, such as a corrected W-2 form from your employer.
If everything looks accurate, there are a few other possible explanations for a lower child tax credit.
Your income may have increased since you filed your taxes. The child tax credit is based on your income, so if your income goes up, your credit may go down.
You may have had another child since you filed your taxes. The credit is per child, so if you have more children, your credit will be spread out over a larger family and may appear smaller.
The value of the credit may have changed. The child tax credit is not fixed and is subject to change each year.
Request an Explanation from the IRS
If you’re wondering why your child tax credit is lower this month, the first step is to contact the IRS and request an explanation. They may be able to help you understand the reason for the decrease, and whether or not it’s temporary. In some cases, the IRS may have made a mistake on your account. If this is the case, they will correct it and send you a refund for any overpaid taxes.
If the IRS is unable to provide a satisfactory explanation, you may need to seek help from a tax professional. They will be able to review your account and determine if there is any problem with your tax return. If there is an error, they will help you file an amended return and get the maximum child tax credit refund that you’re entitled to.
Appeal the Decision
If you feel that the decision to lower your child tax credit is unfair, you have the right to appeal the decision. The first step is to contact the office that made the decision and ask for a reconsideration. If you are still not satisfied with the result, you can appeal to the Social Security Tribunal.