(WJW) — Many families will be receiving advance payments on the child tax credit starting this summer, the Internal Revenue Service says. The American Rescue Plan Act of 2021 expands the tax credit for 2021 only.
According to the IRS, the expansions means:
- Credit amounts will increase for many taxpayers
- The credit for qualifying children is fully refundable, so taxpayers can benefit even if they didn’t earn any income or owe income taxes
- The credit will include children who turn 17 in 2021
- Taxpayers may receive part of their credit in 2021 before filing their 2021 tax return
Families who claim the child tax credit for 2021 will receive up to $3,000 per qualifying child aged 6 to 17 years old at the end of 2021. They will receive $3,600 per qualifying child under age 6 at the end of 2021. Under the previous set-up, the amount was up to $2,000 per qualifying child under the age of 17.
The IRS says the increased amounts are phased out for incomes:
- $150,000 and up for married taxpayers filing a joint return and qualifying widows or widowers
- $112,500 for heads of household
- $75,000 for all other taxpayers
Advance payments of the child tax credit will be made from July through December to those who qualify. The IRS urges people with children to file their 2020 returns as soon as possible to make sure they’re eligible for the appropriate amount of the credit. Read more on the Child Tax Credit on the IRS website.