Recent Tax Changes for 2022

The year 2022 has brought significant changes to the tax laws in the United States. Here are some of the most important changes that you should know before filing your tax return.

Child Tax Credit

The child tax credit has been reduced for 2022. In 2021, the child tax credit offered up to $3,600 per child under age 6, and up to $3,000 per child ages 6 through 17, with half available via upfront payments. But for 2022, the tax break reverts to the previous amount — up to $2,000 per child under age 17.

Child and Dependent Care Tax Credit

The child and dependent care tax credit, which may help offset the cost of care for children under age 13 or adult dependents, has also been reduced for 2022. In 2021, the credit jumped to up to $8,000 for one qualifying person or $16,000 for two or more dependents. However, for 2022, those caps returned to $3,000 and $6,000, for one or multiple dependents, respectively.

Form 1099-K

If you’ve received payments through apps like Venmo or PayPal in 2022, you may get Form 1099-K in early 2023, which reports income from third-party networks. The form applies to business transactions, such as part-time work, side jobs or selling goods, according to the IRS. Before 2022, the federal Form 1099-K reporting threshold was for taxpayers with more than 200 transactions worth an aggregate above $20,000. Now, however, the threshold is just $600, and even a single transaction can trigger the form.