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About the 2021 Refundable Child Tax Credit

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April 16, 2021
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About the 2021 Refundable Child Tax Credit

President Biden signed the American Rescue Plan on March 12, 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 a couple making less than $112,500 a year.
  • The one-year CTC provides $3600 per child under age 6 and $3000 per child ages 6-17
  • It is intended that the benefits of the one-year CTC be paid monthly.

Payments are expected to begin in July 2021 and will go to the parent who claims the child deduction. To receive benefits, file your taxes by May 17, 2021.

  • If you are currently a tax filer, you will automatically receive the credit if you claim your dependents on your tax return.
  • If you are not currently a tax filer, file a 2020 tax return even if you did not work and owe no taxes. Claim your dependents.
  • If you are undocumented, use your ITIN number to file an individual, not a joint tax return. 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.

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.”

Free tax filing assistance - deadline extended to May 17, 2021

  • 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.

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.

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).

Next: Members of Congress are working on legislation to establish a permanent Child Benefit / Child Tax Credit.

The 2021 Refundable Child Tax Credit is in effect a Child Benefit or Child Allowance. A permanent child benefit, paid monthly to mothers or other primary caregivers and available to all families with children would be 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 data -- illustrating the need to support all families and to respect parents' choices about care for children.

t's important for our Congressional representatives to hear from us about the need to relieve stress on parents with a permanent child allowance. 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.

updated 4-16-2021

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Public Policy
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