About the 2021 Refundable Child Tax Credit
President Biden signed the American Rescue Plan in March, 2021. It includes a one-year refundable Child Tax Credit.
- Refundable means that families can receive the CTC even if they earn no income or are unemployed.
- The full credit is available to a single parent making less than $75,000 a year or heads of household making less than $112,500 or married couples filing jointly making less than $150,000.
- The one-year CTC provides $3600 per child under age 6 and $3000 per child ages 6-17
- The IRS started issuing monthly payments in July 2021; half the yearly total can be paid in 2021, to receive the balance, file a tax return in Spring 2022.
Payments will go to the parent who claims the child deduction.
If you have an ITIN number, you can receive the CTC if your child is a US citizen or resident, lives with you at least half of the year, and has a social security number.
Some parents received monthly payments from July through December; the IRS is sending a letter to each recipient with information about the amounts received; save the letter to use when preparing your tax return. The balance of the credit (for the first half of 2021) will be available to those who file a 2021 tax return.
For a detailed explanation, see The Center for Law and Social Policy's post "What Families Need to Know about the CTC in 2022."
See the IRS website: ChildTaxCredit.gov
Free tax filing assistance
- Free tax filing assistance is available through VITA (Volunteer Tax Assistance) programs throughout the country; it's for people who make less than $57,000/year, those with disabilities, those with limited English-speaking.
- The IRS has a partnership with software companies that make tax filing programs – these guide you through the process of doing your tax return; IRS Free File is for those whose Adjusted Gross Income is less than $72,000.
You can help families in your community by:
Letting them know they may be eligible for the the 2021 Refundable Child Tax Credit and other relief payments, even if they've never filed taxes.
Connecting them with free tax preparation services or free software available through the IRS (see links above).
Long-term costs and benefits
Researchers estimating the costs and benefits of the Refundable Child Tax Credit say: “the benefits created by a child allowance could be worth eight times the annual program cost.”
Liz Hipple points to the extensive body of research on poverty and income supports:
“Economic research clearly demonstrates that an investment in families today is an investment in their future economic mobility, as well as in broad-based, stable economic growth. Making the newly enacted child allowance permanent will pay dividends for all Americans far into the future.”
Who is doing the caregiving?
The legislation directs the IRS to pay “taxpayers” without regard for who is doing the caregiving. We will continue to call attention to the need to direct payments to the child’s mother or other primary caregiver. Hopefully there will soon be permanent child tax credits or child benefits and they will be payable to the child’s mother or other primary caregiver.
Next: Members of Congress are working on legislation to extend the Child Tax Credit.
The 2021 Refundable Child Tax Credit is in effect a Child Benefit or Child Allowance; it's an inclusive family policy. We call on policymakers to commit to inclusion in all family policies, and to support caregivers both paid and unpaid.
We are working with allies in other organizations, reaching out to media representatives and to policymakers, pointing to basic principles of inclusion and to evidence illustrating the need to support all families and to respect parents' choices about care for children.
It's important for our Congressional representatives to hear from us about the need to relieve stress on parents by enacting a permanent child benefit. Please use our Speak Up! Speak Out! Advocacy portal – the system will connect you (based on your address) with your Senators and Representative. Tell your story—why is support for parents important to you?
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See the link below for a one-page printable pdf about the 2021 Refundable Child Tax Credit.