The New Child Tax Credit: What You Should Know
This Child Tax Credit (CTC) will provide more cash assistance to low income families than any other federal program. While the credit itself is not new, there have been some updates that will help families throughout the year.
What’s Changed?
These payments are larger than usual with half of the payment coming in advance. This money is a part of President Biden’s American Rescue Plan- a response to the COVID-19 pandemic.
This plan increases the CTC from $2,000 per child to $3,600 per child for children under the age of six, from $2,000 to $3,000 for children over the age of six, and has also raised its maximum child age limit from 16 to 17.
What You Should Know:
- These monthly payments are temporary unless Congress passes legislation that will make it permanent.
- The increased amounts is also temporary unless Congress makes the decision to make it permanent.
- If you completed your 2019 or 2020 taxes, these payments will begin automatically July 15, 2021.
- Half of the money will come in monthly payments. The other half will be received after filing your 2021 taxes.
- If your income or custody arrangement changes in the next year there is a possibility that you may owe money back.
How Do You Opt Out of Automatic Payments?
If your income or custody arrangements changes in the next year there is a possibility that you may owe money back. If you’d like to opt out of monthly payments and get your money in one lump sum you can opt out of monthly payments here.
Follow us and learn more about the Child Tax Credit here.
