This year, the child tax credit will rise to $3,600, with the next advance payment scheduled for Dec. 15. Check out this guide for more details about how much is the child tax credit, who qualifies, when to expect payments, and how to opt out.
IRS statistics indicate that 36 million Americans may be eligible for the child tax credit, or CTC, this year, as part of the American Rescue Plan (TRP). The fully refundable credit is usually up to $2,000 per qualifying dependent, and is set to increase to $3,600 in 2021.
How to Estimate Your Child Tax Credit Amount
The child tax credit 2022 calculator will ask you a few simple questions about your dependents and will tell you if you qualify for the child tax credit and how much you may claim on your tax return.
For the first time in U.S. history, recipients receiving CTCs can also receive half of the credit as an advance cash payment. For many families, this has the potential to result in an additional $300 per child per month for much-needed expenses help.
Five of the six payments have already been disbursed, and the final installment is set for December 15.
Many families have benefited from the enhanced child tax credit, but questions have also been asked about it: Does it apply to me? Should I opt out of the advance payments? What will the advance payments mean for my tax return? Can I use the TurboTax calculator to see how much I get?
Here are some things you need to know about the 2021 child tax credit.
How to Qualify for the Child Tax Credit
To take advantage of the credit, you must have a modified adjusted gross income of:
- Single: under $75,000.
- Head of household: $112,500.
- Married filing jointly: $150,000.
The credit begins to phase out above those thresholds.
First phaseout: If your income exceeds the aforementioned limits but is less than $400,000 (married filing jointly) or $200,000 (single filing), you’ll be phased out (all other filing statuses).
For each $1,000 spent, your total credit per child might be lowered by $50. (or a fraction thereof).
Your credit will not be reduced below $2,000 per child as a result of this phaseout.
Second phaseout: Earnings of more than $400,000 (married filing jointly) or $200,000 (single filing) (other filing statuses).
The phaseout will continue to deduct $50 for every $1,000 spent, bringing your credit per child below $2,000 for the first time.
It’s possible that you won’t be able to acquire the credit at all. A non-filer sign-up tool is available on the IRS’s website for low-income families who do not normally file a tax return.
Some of the other child-related eligibility requirements for the child tax credit include:
- You must have supported the child for at least half of the previous year, and the child must have lived with you for at least half of that time (there are some exceptions to this rule; the IRS has the details here).
- The child is not permitted to submit a joint tax return.
How Much You Can Get for Each Child
The IRS will use the age of your dependents on your most recent tax return to decide how much of an advance to send you each month.
Remember that the advance is just half of the entire credit and will be paid in six monthly installments beginning in July and ending in December.
The remaining credit can be claimed on your 2021 tax return.
- Up to $3,000 ($250 monthly) per qualifying dependent child 17 or younger on Dec. 31, 2021.
- Up to $3,600 ($300 monthly) per qualifying dependent child under 6 on Dec. 31, 2021.
Learn more at Internet Tax Connection