The American Rescue Plan raised the maximum Child Tax Credit in 2021 to $3,600 for qualifying children under the age of 6 and to $3,000 per child for qualifying children ages 6 through 17. In the unlikely event that you receive too much, you might have to pay the excess back, depending on your income level. If you receive too little, you will be due an additional amount on your tax return. Most families will receive about one-half of their tax credit through the advance payments. The amount that you receive will be reconciled to the amount that you are eligible for when you prepare your 2021 tax return in 2022.

These payments are an advance of your 2021 Child Tax Credit. Eligible families will receive advance payments, either by direct deposit or check. Normally, the IRS will calculate the payment amount based on your 2020 tax return.

Most families do not need to do anything to get their advance payment. The expanded and newly-advanceable Child Tax Credit was authorized by the American Rescue Plan Act, enacted in March of 2021. Stimulus impact on the Child Tax Credit and on the Additional Child Tax Credit for 2021 Advance Child Tax Credit Payments Fortunately, the Additional Child Tax Credit (ACTC) gives parents a chance not only to lower their tax bill to help offset these costs, but also to potentially put more money back in their pockets. Department of Agriculture, it costs roughly $233,000 to cover food, housing, transportation, health care, clothing, child care, education, and everything else a child needs to thrive from birth through age 17. For information on the third coronavirus relief package, please visit our “ American Rescue Plan: What Does it Mean for You and a Third Stimulus Check” blog post.

Child tax credit 2020 changes