Question: Your clients, Brian and Angela, have three children under age 17. They fell on some hard times and were unable to work at all during 2022. Their only income was $480 in royalties for some karaoke tracks they created. Thus, they have no tax liability for 2022. The couple does plan to file a joint income tax return for 2022, however. Assuming they meet all other requirements, will they still be eligible to claim the child tax credit for 2022?
Answer: No. They are not eligible to claim the child tax credit for 2022. Apart from 2021, the child tax credit is nonrefundable. Its refundable counterpart, the additional child tax credit, can’t be claimed by the couple because it requires earned income of $2,500 to qualify [§24(h)(6)] and the couple only earned $480 in 2022.
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Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing. All taxpayer circumstances are different, and NATP recommends contacting research services if you have specific questions about your clients’ tax situations.