The Child Tax Credit has undergone changes in the past year as a result of the American Rescue Plan Act of 2021. This credit aims to assist American families by granting a credit for each dependent child.
Read on to learn more about the current Child Tax Credit and credit amounts.
2021 Credit Amounts
Unlike the 2020 Child Tax Credit, the 2021 credit is fully refundable. Taxpayers will receive advance payments on a monthly basis. The credits per eligible child are as follows:
- Children under 6: $3,600
- Children under 18: $3,000
Qualifications
In order to receive the Child Tax Credit, a family must meet the following qualifications:
- Make below a certain income amount
- Children must be legal dependents who are U.S. citizens, nationals, or resident aliens
- Taxpayers and dependents must have Social Security numbers prior to due date
- Dependents must have resided with taxpayer for at least half of the tax year
- Dependents must have relied on taxpayer for at least half of their financial support
To get an idea whether your child or dependent qualifies for the Child Tax Credit, we recommend this tool by the IRS.
What will the Child Tax Credit look like in 2022?
In the midst of the COVID-19 pandemic, legislations are constantly being updated. Currently, the changes made for the Child Tax Credit apply only for the 2021 tax year. If legislation does not extend these changes, it is presumed that the Child Tax Credit will return to its previous state from 2020.
We recommend staying up to date with any possible legislation updates. This includes President Biden’s potential American Families Plan, which may extend the changes that came with the 2021 Child Tax Credit.
Have Questions?
Looking for additional guidance on whether you qualify for the Child Tax Credit, or need assistance filing your return? Consult with the professionals at Matthews & Nulty.
Call us today at 732-257-8604 or send us a message on our website to get started.
