On July 15, millions of families across the nation began receiving additional resources to pay for some of the costs needed to raise healthy and thriving children, including essentials like clothing, diapers, educational expenses, and more.
Earlier this year, Congress passed a historic expansion of the Child Tax Credit
in the American Rescue Plan that is expected to reduce the number of children living in poverty by more than 40 percent
. Important improvements to the credit include expanding the amount families receive, allowing older children to qualify, and including families who previously who were left out of the credit.
It also now delivers the credit it a very different way. While usually families receive their tax credits after they file their income tax returns, with these changes, families can receive half of their Child Tax Credit as monthly payments for the remainder of the year. The other half of the credit will be sent as a lump sum when families file their 2021 federal income taxes next year. While proponents are urging that the new changes to the credit become permanent, for now, this is a temporary one-year expansion.
Here we break down some basic information as to who is eligible for the Child Tax Credit, how much families will receive, and how families can receive their credits.
Who is eligible?
Most families with children are eligible to receive the expanded Child Tax Credit. There are no minimum income or earned income requirements. Recipients and their spouse must have a Social Security Number or Individual Taxpayer Identification Number (ITIN) and children claimed for the credit must be age 17 or under and meet the definition of a “qualifying child.”
Families with incomes up to $150,000 headed by a married couple, or up to $112,500 for a family headed by a single parent (also called Head of Household), will receive the maximum amount of credit per child, which is:
- $3,600 total for each child under 6 years old
- $3,000 total for each child 6 to 17 years old
Families with higher incomes may qualify for smaller amounts of Child Tax Credit.
Receiving the Child Tax Credit will not impact other federal benefits that families may receive, such as unemployment insurance, SNAP, Medicaid, Section 8 housing assistance, or other supports.
How will the advance Child Tax Credit be delivered?
Most families will receive their monthly advance Child Tax Credit amounts automatically, but some will need to provide information to the IRS.
Families who filed federal income taxes in 2019 or 2020, or signed up to receive at least one of the three stimulus checks (also known as “Economic Impact Payments”) from the IRS:
These families do not need to take any action and start receiving automatic payments in July. Families who receive federal income tax refunds from the IRS through direct deposit will receive these payments
in their bank accounts on the 15th of each month until the end of the year. Those who did not use direct deposit will get their payments by mail around the same time.
Families who are not normally required to file income taxes, and did not file a federal income tax return in 2019 or 2020 or sign up for federal stimulus payments:
These families will need to use the Non-Filer Sign-up Tool
to receive the advance Child Tax Credit.
- Information needed to complete the process includes:
- Social Security Numbers for all eligible children and Social Security Numbers or ITINs for parents
- A reliable mailing address
- E-mail address
- Bank account information (if the family wants to receive their advance Child Tax Credit by direct deposit)
Families using the Non-Filer Sign-up Tool
to receive the Child Tax Credit can also apply for the Recovery Rebate Credit (stimulus payments) as part of this process.
For more information
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