Charitable Contributions

In 2022, charitable contribution deductions revert back to normal. In order to take advantage of a charitable contribution tax deduction, taxpayers will have to use itemized deductions. Even if you normally do not use itemized deductions, please bring in at tax time documentation of any charitable contributions. When preparing the return, tax preparers will evaluate standard deduction vs. itemized deductions.

Child and Dependent Care Credit (DCC)

• In 2022, taxpayers will receive a lower child and dependent care credit as expenses are limited to $3,000 for one qualifying person and $6,000 for two or more qualifying persons. The credit expense percentage is based on "earned income" and ranges between 20% to 35%.
• The maximum credit you could receive is $2,100
• The child and dependent care credit is no longer refundable for year 2022.

Child Tax Credit (CTC)

In 2022, child tax credit rules have changed back to pre-2021 rules. There were no advanced child tax credit payments in 2022, meaning that if you are eligible for the child tax credit, you will receive the entire credit on your tax return.

You can get up to $2,000/child (ages 16 and under). Last year the tax credit was also fully refundable, meaning that if the credit amount a taxpayer qualified for exceeded the amount of taxes they owed, they could get the difference back. In 2022, the tax credit will be refundable only up to $1,500 (up from $1,400 in 2020 to adjust for inflation), depending on your income, and you must have earned income of at least $2,500 to even be eligible for the refund.  

• To receive the full tax credit, a taxpayer's adjusted gross income must be under $200,000 (Single); $400,000 (Joint)
• If a taxpayer's adjusted gross income is above those limits, the credit reduces by $50 for every $1,000 beyond the threshold limits.

Energy Credits

• In 2022, taxpayers can possibly receive a federal income tax credit (ranges from $2,500 to $7,500) if you bought and placed in service a NEW electric vehicle
• For 2022, there are NO income limits for individuals buying a EV but there are income limits after 2022
• If you purchased a new EV in 2022 and believe you're eligible, please bring in a copy of the sales invoice and VIN
• There are strict rules to be able to qualify - when preparing your tax return, we will check to see if you qualify or not