How to Claim the Expanded Child Tax Credit on Your Taxes This Year
There are lots of good reasons to do your taxes this year, but here’s an especially urgent one for families: You have to file to receive the rest of your child tax credit money.
As part of last year’s American Rescue Plan, the federal government made some major changes to the child tax credit for 2021. It increased the maximum value of the credit from $2,000 per child to $3,600 per child, expanded eligibility and allowed families to receive half of the credit in advance payments. The IRS sent out those installments over the course of six months from July to December.
Now, to get the other half of that money, families will need to file their 2021 taxes. Here’s everything you need to know about how to claim the child tax credit on your taxes.
Who's eligible to claim the expanded child tax credit
The expanded 2021 child tax credit is available for people who meet certain income requirements. Married couples filing jointly with an adjusted gross income (AGI) of $150,000 or less in 2021, heads of household with an AGI of $112,500 or less, and single filers with an AGI of $75,000 or less are all eligible for the full credit.
If you fall below those income thresholds, you can claim $3,000 per child between ages 6 and 17 and $3,600 for children ages 5 and under (as long as those children have a Social Security number that is valid for employment).
If your AGI exceeds those thresholds, the credit decreases by $50 for each $1,000 in income above the thresholds. It fully phases out at $440,000 for joint filers and $240,000 for everyone else.
The government also made the credit fully refundable for 2021, meaning that you can claim the full amount even if you didn’t make enough money to file taxes at all last year. You just need to file a return. Your child tax credit funds will either come as part of your refund or decrease the amount you owe the IRS.
How to tell how much child tax credit money you got
If the IRS sent you any advance CTC payments, you should have received Letter 6419 in the mail in December or January. That letter will tell you how many eligible children you have and how much money you received in 2021. Make sure you have the letter handy before you file your taxes this year — you’ll need it to figure out how much money you’re still owed. If you think the letter is incorrect, you can also check how much money you received using your IRS online account or child tax credit update portal.
If you opted out of the advance payments last year, you can claim the entire credit when you file your taxes.
The same is true if you welcomed a baby in 2021: As long as you meet the income requirements, you’re eligible to claim the entire credit (or the remainder that you're owed, if you opted into advance payments at some point during the year) for your new addition even if they were born at the very end of the year.
Claiming the child tax credit on your 2021 taxes
You can figure out how much money you can claim by using the worksheet called “Credits for Qualifying Children and Other Dependents," or Schedule 8812. Follow the instructions on that form and attach it to your Form 1040 when you file.
For more information about the credit — including details about eligibility, answers to frequently asked questions and instructions for filing — you can visit ChildTaxCredit.gov.
If it turns out you received more money in advance than you were eligible for in 2021 — either because your income increased, your filing status changed, you moved overseas or another reason — you might need to repay some or all of the excess to the IRS.
If you don't normally file taxes but plan to do so this year to receive the credit, there are several services that can help guide you through the process. The IRS' Free File program is one, as are the agency's Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs. Filing for the credit won't affect your eligibility for other benefits like unemployment insurance, Medicaid or SNAP.
It's a good idea to file as soon as possible this year even though the deadline isn’t for another few weeks. The IRS is understaffed and dealing with an enormous backlog of returns. That means there’s a good bet that the agency will take longer than usual to process returns submitted on paper and those that contain with mistakes.
Also, the credit was significantly expanded in 2021, but that won’t be the case for 2022 unless Congress acts — and there's no guarantee that it will. If you’re eligible, don’t lose out on the extra CTC money this year.
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