The American Rescue Plan Act increased the maximum Child Tax Credit amount in 2021 to $3,600 per child for children under the age of 6 and $3,000 per child for children ages 6 through 17.

The credit is usually available only when a person files his or her income tax return. Half of the advance child tax credit is being sent beginning this summer to help eligible families. The advance Child Tax Credit payments will be made on the 15th of each month beginning July 15th.  The expanded child tax credit monthly payments for a family of four can be from $500 to up to $600 a month. The IRS said an estimated 36 million families are expected to qualify for these payments. According to a news release from the IRS, most families eligible for the payment will automatically receive these payments without requiring any further action.

To qualify for advance Child Tax Credit payments, if taxpayers filed a joint return, they must have filed a 2019 or 2020 tax return and claimed the Child Tax Credit on the return. If no tax return was filed, taxpayers must provide information in to receive the Economic Impact Payment using the Non-Filers IRS Tool and ensure all of the following requirements are met to receive the advance payments for Child Tax Credit.

  • The taxpayer has a main home in the United States for more than half the year (the 50 states and the District of Columbia) or files a joint return with a spouse who has a main home in the United States for more than half the year; and
  • The taxpayer has a qualifying child who is under age 18 at the end of 2021 and who has a valid Social Security number; and
  • The taxpayer made less than certain income limits (AGI below $240,000 for single and head of household filers; and AGI below $440,000 for Married Filing Joint filers).

The IRS Non-Filer Sign-Up Tool is now available on IRS.gov to help families understand, register for, and monitor these payments.

We will continue to provide additional updates regarding this legislation. There is a lot of available information to assist taxpayers experiencing COVID-19 related financial difficulties to be aware of these options and get assistance. Contact us today to review your options.

Maria D. Stromple, CPA, MST

Maria is a Partner at Wilke & Associates, servicing closely-held businesses in manufacturing, real estate, transportation/logistics, technology industries, and high net worth individuals and executives in delivering effective tax strategies.