The American Rescue Plan Act that was signed into law in March by President Joe Biden, provides a one-year expansion of child tax credits that we want to make sure you are aware of.
In 2021, the maximum child eligibility age is raised by one year to 17, and the maximum tax credit is increased from $2,000 to $3,600 for each child under 6 and $3,000 for each child age 6 to 17.
The 2021 credit will be fully refundable, meaning families can receive the money even if they pay less than this amount in taxes.
Working families eligible for this tax credit will not have to wait until filing their 2021 taxes next year either, half of the credit is expected to be sent out by the federal government as monthly payments from July to December of this year (this will be based on the taxpayer’s most recent tax filing so that’s why it’s important to file taxes now if you haven’t in the past). The rest will then come as a credit or refund on next year’s taxes.
If you haven’t filed taxes, file them NOW. Even if you earned no money or very little, you could be eligible for a stimulus check or money from other tax credits like the child tax credit if you have dependent children you care for.
The IRS will setup two online portals to reach low-income families who don’t usually pay taxes as well:
- The first portal will allow filers to submit their family and income information and then claim any stimulus payments they may have missed since the beginning of the pandemic.
- The second portal will allow filers to update key information such as their address, income, and family size, all factors that impact how much money one can expect.
The expanded child tax credits will help millions of families and we wanted to make sure you knew about this important change for 2021. If you already receive your tax refund via direct deposit from the IRS, you can expect to receive the monthly payments starting in July through direct deposit if you are eligible.
As a union, we believe everyone should have the ability to live a full and plentiful life of their choosing. Ensuring our kids have the resources they need is a crucial part of that vision and these expanded child tax credits will help to that end.