Child Tax Credit

The American Rescue Plan increased the Child Tax Credit and expanded its coverage to better assist families who care for children.

Overview

The American Rescue Plan’s expansion of the Child Tax Credit will substantially reduce child poverty by (1) supplementing the earnings of families receiving the tax credit, and (2) making the credit available to a significant number of new families. Specifically, the Child Tax Credit has been revised in the following ways for 2021:

  • The credit amount has been increased. The American Rescue Plan increased the amount of the Child Tax Credit from $2,000 to $3,600 for qualifying children under age 6, and $3,000 for other qualifying children under age 18.
  • The credit is now fully refundable. By making the Child Tax Credit fully refundable, low- income households will be entitled to receive the full credit benefit, as significantly expanded and increased by the American Rescue Plan.
  • The credit’s scope has been expanded.  The American Rescue Plan allowed 17-year-olds to qualify for the Child Tax Credit. Previously, only children 16 and younger qualified.
  • Eligible taxpayers will receive advance payments of half of their estimated 2021 Child Tax Credit amounts during 2021. This change will allow struggling families to receive financial assistance now, rather than waiting until the 2022 tax filing season to receive the Child Tax Credit benefit.  The IRS and the Bureau of the Fiscal Service will make these advance payments to eligible taxpayers on a periodic basis from July through December 2021.

 

In addition, the American Rescue Plan has extended the full Child Tax Credit permanently to Puerto Rico and the U.S. Territories. For the first time, low- income families residing in Puerto Rico and the U.S. Territories will receive this vital financial assistance to better support their children’s development and health and educational attainment.

Recent Updates

  • IRS Non-Filer Tool
    • Most families will automatically start receiving the new monthly Child Tax Credit payments on July 15th.
    • Families who normally aren’t required to file an income tax return should use this Non-Filers Tool to register quickly for the expanded and newly-advanceable Child Tax Credit from the American Rescue Plan.
  • Child Tax Credit Portal 
    • Use this tool to:
      • Check if you’re enrolled to receive payments
      • Unenroll to stop getting advance payments
      • Provide or update your bank account information for monthly payments starting with the August payment
  • Child Tax Credit Eligibility Assistant 
    • Check if you may qualify for advance payments.

 

Spread the word

RESOURCES