What’s new with the Child Tax Credit?

What’s new with the Child Tax Credit?

Child Tax Credit

In 2021, The American Rescue Plan expanded the Child Tax Credit—here are the details:

The amount for kids under 6 went from $2,000 to $3,600.
The amount for kids ages 6-16 went from $2,000 to $3,000.
17-year-olds were previously past the cut-off, but are now eligible for a credit of $3,000.
In addition, the entire credit is fully refundable for 2021. This means eligible families can get it, even if they don’t owe federal income taxes.

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Advance Child Tax Credit payments

In 2021, many families received advance payments on their Child Tax Credit. These monthly payments let eligible recipients get part of their credit upfront, instead of waiting until they file taxes.

In May 2021, the IRS sent out a letter letting families know they’d begin receiving advance payments in July. The letter also provided instructions for opting out of advance payments.

Most eligible families received about one-half of their tax credit through advance payments, and will claim the remaining half of their credit when they file this year’s return.

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