Child Tax Credit
The IRS recently announced additional details and changes to the Child Tax Credit (CTC), outlined in the American Rescue Plan. We've included several key highlights below:
- The first payment will be made on July 15, 2021.
- Payments will be automatic on the 15th of each month through December 2021. No action is required by the recipient unless there are new children born (or adopted) in 2021 or in 2020 and the 2020 return has not yet been filed.
- The maximum tax credit increased in 2021 to $3,600 per child under age 6 and $3,000 per child age 6-17.
- Eligibility for the full credit includes joint filers whose AGI is under $150,000 and single filers whose AGI is under $75,000. The credit will phase out above these income levels.
- Joint filers earning above the phase out limit for the enhanced benefit and under $400,000 per year will still receive $2,000 per child up to age 17.
- The credit that is available for advance payment over the months of July through December 2021 will equal 50% of the total expected credit. The 50% credit will be paid in six equal installments starting on July 15, 2021.
For additional information on the CTC, please visit https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021.
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