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Understanding the Child Tax Credit
As part of the American Rescue Plan Act, passed into law in March 2021, significant changes were made to the Child Tax Credit (CTC). The changes include increased value to the CTC, increased age limits for children, and advanced payment of the CTC.
The IRS will pay half the total Child Tax Credit amount in advance monthly payments beginning July 15. You will claim the other half when you file your 2021 income tax return, in 2022. These changes apply to tax year 2021 only. Unenrollment is an option, depending on your personal circumstances and needs. To understand more about this option, as it does come with a deadline, visit this IRS resource.
The Internal Revenue Service (IRS) uses the direct deposit information you provided in your 2020 tax return to apply the monthly payments. If you did not provide direct deposit information, you can expect to receive a traditional paper check in the mail. If you aren’t required to file a tax return and haven’t given the IRS your information already, you will need to enroll as a non-filer for the Child Tax Credit.
Inquiries regarding the Child Tax Credit need to be directed to the IRS, as Suncoast Credit Union cannot assist with CTC payment enrollment or other tax advisement issues related to the CTC.
Knowing If You Qualify
To qualify for advance Child Tax Credit payments, you — and your spouse, if you filed a joint return — must have:
- Filed a 2019 or 2020 tax return and claimed the Child Tax Credit on the return; or
- Given the IRS your information in 2020 to receive the Economic Impact Payment using the Non-Filers: Enter Payment Info Here tool; and
- A main home in the United States for more than half the year (the 50 states and the District of Columbia) or file a joint return with a spouse who has a main home in the United States for more than half the year; and
- A qualifying child who is under age 18 at the end of 2021 and who has a valid Social Security number; and
- Made less than certain income limits.
If you qualify, you’ll receive:
- $3,600 for children ages 5 and under at the end of 2021; and
- $3,000 for children ages 6 through 17 at the end of 2021.
Your tax return information was applied by the IRS to automatically enroll you for advance payments. You do not need to take any additional actions to receive the advance payments, only to unenroll.
The IRS has extensive resources to help you understand the details of the Child Tax Credit. To learn more, please visit the resources provided by the Internal Revenue Service.