Expanded Child Tax Credit
More relief is on the way for those of us with children. For the 2021 tax year, the American Rescue Plan Act temporarily increases the child tax credit from $2,000 to $3,000 per child, ages 6 to 17, and up to $3,600 for children 5 years old and younger.
Even better news? You don’t have to wait until you file your 2021 taxes to get the full child tax credit. The total credit amount will be paid out in installments with one half of monthly payments beginning July 15 and the other half will be claimed as a credit on your 2021 tax return.
To calculate exactly how much your monthly payment will be visit Kiplinger’s 2021 Child Tax Credit Calculator.
The maximum amount available to you is dependent on your adjusted gross income and your filing status. The maximum credit is available to taxpayers with a modified Adjusted Gross Income of:
- $75,000 or less for single tax payers
- $112,000 or less for head of household
- $150,000 or less for married couples filing a joint return and a qualifying widow(er)s
- Higher income taxpayers will see a reduction of the increased amount based on a phase-out approach
If you filed your 2019 or 2020 tax return and claimed the Child Tax Credit or you submitted your information in the non-filers portal to receive the Economic Impact Payment you do not have to do anything. You should automatically start receiving your monthly payments beginning July 15.
If you have not filed your taxes or submitted your information in the non-filers portal, use the IRS Child Tax Credit Non-filer Sign-up Tool to ensure you receive your advance child tax credit.
The IRS has a page dedicated to information about the Advance Child Tax Credit with FAQs where they will be adding more tools to help check eligibility, manage payments and unenroll from the advanced payments if you preferred to get your child tax credit in one lump sum when you file your 2021 tax returns.
Credit Human is committed to helping you build slack when you need it most. Make an appointment with one of our Financial Health Centers today. While we may not be tax experts, we are here for you by connecting you with local resources in the communities we serve. This is just one of the many ways we can help.