Child Tax Credit – reverts to the benefits available prior to the American Rescue Plan as follows:
- Reverts to up to $2,000 for 2022 – 2025
- Each dependent child must be under age 17
- Refundable up to $1,400, but no longer fully refundable
- Advance payments were not issued for tax year 2022
- The credit is available if you earn up to $200,000 as single taxpayer or head of household (or up to $400,000 if you are a married couple filing jointly)
Child and Dependent Care Credit – adjusts back to the pre-2021 provision and changes back to:
- Up to 35% of $3,000 ($1,050) of childcare expenses for a dependent child under 13, an incapacitated spouse or parent, or another dependent so that you can work or look for work. If you have two or more dependents, the credit will be up to 35% of $6,000 in expenses ($2,100).
- The credit will be reduced at incomes over $15,000
Cash Donations – for those taxpayers claiming the standard deduction, you will no longer be able to deduct up to $300 ($600 if married filing jointly) in cash donations.
In general, the following changes have also occurred–
- The standard deduction for married couples filing jointly for tax year 2022 rises to $25,900 up $800 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $12,950 for 2022, up $400, and for heads of households, the standard deduction will be $19,400 for tax year 2022, up $600.
· Marginal Rates: For tax year 2022, the top tax rate remains 37% for individual single taxpayers with incomes greater than $539,900 ($647,850 for married couples filing jointly).
· The other rates are:
35%, for incomes over $215,950 ($431,900 for married couples filing jointly);
32% for incomes over $170,050 ($340,100 for married couples filing jointly);
24% for incomes over $89,075 ($178,150 for married couples filing jointly);
22% for incomes over $41,775 ($83,550 for married couples filing jointly);
12% for incomes over $10,275 ($20,550 for married couples filing jointly).
The lowest rate is 10% for incomes of single individuals with incomes of $10,275 or less ($20,550 for married couples filing jointly).
