UPDATE 6/24/2021: The IRS website is ready and now up and running for the Child Tax Credit! We want to highlight that both the Taxpayer and Spouse must unenroll in receiving advance payments.
Larry Andler, CPA, and Nicole LeBlanc, Tax Manager, break down important details of the Child Tax Credit. The CTC has been available for some time, however, the new American Rescue Plan Act of 2021 will expand the Child Tax Credit in important ways.
Changes to the credit include an increase in the amount of credit. Those claiming the child tax credit will receive up to $3,000 per qualifying child and an additional $3,600 per qualifying child at the end of 2021. Half of these amounts will be paid regularly from July through December and payments are expected to start in mid-July of this year.
Eligibility has increased with an extension of the child age qualifications, now including children who turn 17 in 2021. The American Rescue Plan Act also creates a way for eligible individuals to collect partial payments in 2021 before filing a tax return. The credit is now fully refundable, allowing taxpayers to benefit from this credit even if they don’t have earned income or don’t owe any income taxes. There is an option on the IRS website to unenroll from the advanced credit for those who know they will not qualify.
Financial planning and tax planning can help to ensure that credits are taken advantage of through the new American Rescue Plan Act changes. If you have any questions regarding the Child Tax Credit, reach out to LGA. We’re here to help.
For more information about the available tax credits, LGA experts can assist with Individual Taxes.