Child Tax Credit

Note: There are several major changes to the Child Tax Credit (CTC) for 2021: the amount per child has been increased, and you will receive part of it as an advanced credit each month beginning July 2021. You claim the rest of the credit when you file your 2021 tax return in 2022.

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The Child Tax Credit is a federal tax credit designed to help families offset the cost of raising children. A family must have at least $2,500 in earned income to claim any portion of the credit. The credit is worth up to $2,000 per child under age 17 at the end of the tax year, and is subtracted from the amount of income taxes the family owes.

If the credit exceeds the amount of taxes the family owes, a percentage of the remaining credit is given back to the family in a refund check. Up to $1,400 of the credit is refundable.

A family can apply for the Child Tax Credit in addition to the Earned Income Tax Credit (EITC) and the Child and Dependent Care Tax Credit (CDCTC). The EITC and CDCTC do not affect a family’s eligibility for this credit.

Note: As part of the stimulus relief bill, parents received advance payments of the child tax credit (CTC) in six monthly installments last year. The other half can be claimed now during tax season.

Typically, the max CTC is $2,000 is only claimed during tax season. In 2021, the max benefit was:

  • $3,600 per eligible child under the age of six
  • $3,000 per eligible child from ages 6 through 17

Since you already received half of the total special benefit in monthly installments in 2021, you will now receive between $1,500 to $1,800 this year.

Who Qualifies?

  • The child must be a US citizen, national, or resident alien who resides with the taxpayer,
  • The child must be a son, daughter, adopted child, grandchild, stepchild, or foster child,
  • The child must be under 17 at the end of the year,
  • The child must qualify as a dependent, and
  • The child must have a valid Social Security number by the return due date.

How to Apply

Eligible filers can claim the CTC on Form 1040 line 12a or on Form 1040NR, line 49.

For free tax help contact a Volunteer Income Tax Assistance location near you. For free legal assistance on federal tax matters contact the RILS’s Low Income Taxpayers Clinic.

People may want to try to use the IRS Free File options available on the IRS website.