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Child Tax Credit 2021 Fact Sheet

The American Rescue Plan Act changed the Child Tax Credit to increase the amount of the payments, make more people with lower incomes eligible for the payments, and to send out the payments periodically during the second half of 2021. See our fact sheet for more information on the 2021 Child Tax Credit.

Click here to download the PDF version of this publication.

Important information for Kansans with disabilities:

The American Rescue Plan that was signed into law on March 11, 2021 enhanced aspects of the Child Tax Credit (CTC) for one year.

What are the main changes to the Child Tax Credit for 2021?

In 2020, the Child Tax Credit was up to $2,000 per qualifying child. $1,400 of it was refundable and to claim it, you had to earn at least $2,500 in income. For 2021, the following things will change:

• The Child Tax Credit is now going to be up to $3,600 per child under 6 and up to $3,000 per child aged 6 – 17.

• The Child Tax Credit will now include 17 year olds. Prior to 2021, it only included children under 17.

• The Child Tax Credit will be fully refundable. This means that you will now get the full amount that you are eligible for even if you don’t owe any income taxes.

• There is no income requirement to get the Child Tax Credit in 2021. This will expand the benefit to many low-income families that were not eligible before.

• Families will receive advance payments in periodic, smaller amounts during the second half of 2021. They will then receive the rest of the payment as a lump sum with their tax return.

Am I eligible for the Child Tax Credit in 2021?

The IRS will use your 2020 tax return to determine your eligibility for the Child Tax Credit. If this information is not available, they may use your information from 2019. If you have qualifying children and do not make more than the following amounts, you should be eligible.

• $75,000 if you are a single-filer;

• $112,500 if you are head of household; or

• $150,000 if you are a couple filing jointly

It will then phase out. Individuals making up to $200,000 and couples making up to $400,000 can still get the Child Tax Credit at lesser amounts.

Will the Child Tax Credit affect my eligibility for Medicaid or Social Security benefits?

No. The Child Tax Credit is not considered as income or as a resource (asset). It will not affect your current or future eligibility for Medicaid or Social Security benefits.

Is there a limit to how many children my family can get benefits for?

No. You can get a tax credit for each qualifying child.

When will I get the payments?

The American Rescue Plan called for the IRS to distribute payments monthly from July to December. This would be payments of up to $300/month for children under 6 and $250/month for children 6-17. Only half of the child tax credit will come in the form of advance payments. Then, you would get second half of the payment with your 2021 tax return. However, the IRS has some flexibility in case it is not possible for them to get the payments out monthly. They are supposed to distribute them as frequently as possible, so there is a possibility that there could be less frequent periodic payments instead of monthly.

Do I need to do anything to get the payments?

You need to file a 2020 tax return to get the payments. The deadline to file a 2020 tax return is May 17, 2021.

What if I don’t usually file taxes because my income does not require it?

To receive payments through the Child Tax Credit, you must file a 2020 tax return, even if you would not otherwise need to file taxes.

What if there are changes to my income or family during the year?

The law asks the IRS to create an online portal where you can update information on your family or income during the year if there are changes that affect your child tax credit. This portal is not yet available. This portal will also allow you to opt out of the monthly payments if you wish to receive your credit as one full payment.

What if I receive the advance payments but my child doesn’t live with me anymore?

There are protections in place to help in this situation. If your income is below the following amounts, you will not have to pay the money back:

• $40,000 if you are a single-filer;

• $50,000 if you are head of household; or

• $60,000 if you are a married couple filing jointly

The amount that you have to pay back will then phase in, so if your income is above those amounts, you may only have to pay part of the money back.

Will the changes to the Child Tax Credit continue past 2021?

The Child Tax Credit is only guaranteed to be in effect for 2021. Some politicians are advocating for it to continue longer, but it is currently unknown whether it will last longer than 2021 or not.

How can I find out more?

The information mentioned in this fact sheet is likely to change throughout 2021 as the IRS works out the details of how the changes to the Child Tax Credit will work. We will try to update this publication on our website with the newest information, but the most up to date information can be found at IRS.gov.