We thought we would give everyone a brief description and update on the federal Child Tax Credit (CTC). This has been one of the ‘levers’ that the federal government has pulled in order to get more money into the pockets of taxpayers that have children and fall within certain income limits.
What is the Child Tax Credit?
The CTC is a tax benefit to help families who are raising children.
What’s new for the tax year 2021 tax return?
- Increase from $2,000 to $3,000 per child for children over the age of six
- Increase from $2,000 to $3,600 for children under the age of six
- Raised the age limit from 16 to 17
- Full credit for families making up to $150,000 for married filing jointly or $112,500 for head of household
- The full credit is now refundable (previously only up to $1,400 could be refunded)
- Advance Child Tax Credit – starting in July of 2021
- For every child 6-17 years old, families will get $250 each month
- For every child under 6 years old, families will get $300 each month
- Receive the remainder of the credit when you file your taxes
Please see the link below to see if you are eligible to receive these payments, check on your payments, or stop the advance payments from being received.
Your tax professionals will need to know if you received Advance Child Tax Credit payments during the year and if so, how much you received. This will be reconciled on your 2021 tax return, with the balance of the credit being given to you.