Best practice is to remain rear facing to the limits of the seat — until at least age two; but the bare minimum by law is to 1 year old AND 22lbs AND walking unassisted before turning forwards.
There are two types of seats children may be rear facing in: infant only ‘bucket’ style carriers or infant/child seats (also sometimes referred to as convertible seats). If using an infant carrier, check for approved in-vehicle handle position(s). There is no rule that applies to all infant carriers (some must always be down in the vehicle, some must always be up, and some allow more than one position).
When installing the seat, make sure it is reclined to approximately a 45° angle for newborns (carefully follow angle indicators on your specific seat – a bubble, gravity indicator, level-to-ground line, etc. — if there’s a range of reclines permitted get it as reclined as possible while still being in the acceptable range). Check your manual to find out if you can install it more upright for older children. You are aiming for 1″ or less of movement at the belt path when installed with either UAS (latch) or seat belt (but never use both at the same time).
When buckling the child in the seat, ensure that the harness is AT or BELOW shoulder level. The harness should be tight, so that you can’t pinch a horizontal fold of harness at the collarbone. The chest clip should be positioned at armpit or nipple level. Legs touching the back of the seat is fine. Kids can sit in ways that would be uncomfortable for us!
Rear-facing seats are outgrown when the child approaches the height or weight limits for the seat, or has 1” or less of hard shell above the head (consult your manual for specifics).