The IRS Probably Owes You More Child Tax Credit Money. Here's How to Get It
All the advance payments of the expanded child tax credit have been sent out to families, but there’s more money where that came from. You just need to file a tax return — ideally on the early side.
As part of the American Rescue Plan last year, the Biden administration authorized a significant expansion of the child tax credit for 2021. Under the new law, the maximum value of the credit rose to $3,600 (from $2,000) per child, depending on their age and family income level. The expansion also directed the IRS to send out half the credit to qualifying parents and caregivers in the form of six monthly payments, the last of which went out in December.
The families of 61 million children have received the advance payments, according to the White House. Now, to obtain the other half of the money, they must file a tax return — even if they're not normally required to do so.
“Our message today is simple,” Vice President Kamala Harris said in prepared remarks on Tuesday. “If you are eligible for the child tax credit and the earned income tax credit, we want you to get those credits. And you know why: Working families deserve a break.”
Already, the expanded CTC has been credited with lifting millions of children out of poverty. Data from the Columbia University Center on Poverty and Social Policy show that the credit reduced monthly child poverty figures by roughly 30%. The December payment alone kept 3.7 million children from falling below the poverty line over the course of the month.
Proponents of the expanded credit want to make the expansion permanent, but the fate of that effort is not yet clear.
Claiming the child tax credit on your 2021 taxes
For now, the government is encouraging families to file their taxes to make sure they receive the full amount they're due. Tax season officially began Jan. 24, and the deadline to file a return is April 18 for most people. You should be prepared for delays: The IRS is dealing with an enormous backlog as it juggles a slew of new pandemic programs and rule changes. To make the process as painless as possible, file your taxes early and electronically, if you can.
If you received the advance child tax credit payments last year, the IRS should have mailed you a letter recently containing information about how many eligible kids you have and how much money you got. This document, Letter 6419, will help you claim the remaining funds on your 2021 tax return.
Some families chose to opt out of the advance payments in order to claim the full credit — and receive a larger tax refund — down the line. The CTC is fully refundable, which means that it will either reduce your tax liability when you file or come as part of your refund after your taxes have been submitted.
Even if you didn’t receive any advance payments in 2021 or opt out, you might still newly qualify for the full credit. If you had a baby last year, for instance, you can claim the credit when you file your 2021 taxes. Visit childtaxcredit.gov to learn more.
The key is to not delay.
“Remember: You are owed more, but you still need to file your taxes," Harris said.
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