2021 Child Tax Credit Explained

August 24, 2022

The 2021 child tax credit is a series of stimulus checks paid monthly as well as a larger check after you have filed taxes for the 2021 tax year.

What is a child tax credit and how might it apply to you? If you have young children living in your household as dependents, then you might have gotten a special kind of stimulus check for families. This stimulus check is called the child tax credit. When you file taxes each year, you record how many children you have in the household when you record the number of dependents in your household. This will then impact whether you received any child tax credit stimulus checks this year. We hope to answer all your questions regarding the 2021 child tax credit and any future child tax credits you should be aware of.

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What Is The Child Tax Credit?

The child tax credit is a stimulus check that is a part of the American Rescue Plan. The American Rescue Plan is an act that has also been referred to as the COVID-19 Stimulus Package. It's a stimulus bill or act that helps deliver direct relief to the American people through checks. One of these checks includes the child tax credit, a check given specifically to households with children. This tax credit check started going out to most families on July 15th, 2021. Most families then started to receive a monthly payment of $250 to $300 per child in the household. 

What Is The Child Tax Credit For?

The purpose of this money is to help households with children. These payments are meant to be used toward the cost of raising those children. As the head of household, you would be responsible for making sure these payments are going toward qualifying children in your household and the cost of raising and caring for these dependents. 

The Child Tax Credit 2021 

Taxpayers in 2021 who enroll and qualify can receive $2,000 to $3,000 per child in the household. This is for children over the age of 6 years old. Families can receive $2,000 to $3,600 per child in the household for children under the age of 6 years old. In 2021 the oldest age limit for children that qualify for the child tax credit moved from 16 to 17 years old as well. 

The Child Tax Credit in the American Rescue Plan is scheduled to only be for the year 2021. But it is a tax credit that could potentially be extended beyond the year 2021 as well. The 2021 president, President Joe Biden, has proposed to extend this tax credit to families for many more years in his Build Back Better Agenda. 

Dad high fiving son in the sunset

How Does the Child Tax Credit Work?

To receive automatic monthly payments for this particular tax credit, taxpayers needed to have filed tax returns for the 2019 or 2020 tax year. You might have also needed to sign up to receive stimulus checks from the Internal Revenue Service (IRS). Households need to have qualifying children in order to get child tax credit payments. Qualifying children include dependents that are younger than 17 years old. But the payments you qualify for may be slightly different for a child ages 6 to 17 vs a child ages 6 or lower. Each working family will receive somewhere between $3,000 to $3,600 per child, if eligible for the tax credit. 

There is also a non-filer sign-up tool that was created for low income families that don’t make enough income to file taxes. This allows families living below the poverty line to still sign up for this stimulus check. In 2021, the deadline to sign up this way was November 15th. Households can also get their full benefits if they missed any when they file 2021 tax returns for the IRS the following year. 

Who Qualifies For The Child Tax Credit?

You can receive payments during tax season or you can start getting payments sooner by qualifying for advance child tax credit payments. You’ll need to meet certain qualifications in order to get these earlier payments though. 

  • You’ll need to have filed your 2019 or 2020 tax return
  • You’ll need to have claimed this credit on one of those tax returns 
  • You’ll need to have used the Non-Filers tool if you are a non-filer, giving your information to receive this credit in 2020 or 2021
  • You’ll need to have lived in the US for more than half a year or filed jointly with your spouse who lived in the US for more than half a year 
  • You’ll need to have a qualifying child living in your household under the age of 18 with a valid social security number 
  • You’ll need to meet certain income limits 

When Is The Child Tax Credit Coming?

There has been some confusion regarding when the child tax credit will be coming because it is being delivered in 2 parts. Most Americans will have already received the first part by now and the rest will come in 2022. 

Child tax credit on a sticky note

Part 1: Monthly Child Tax Credit

The first half of the credit will be received through monthly child tax credit payments. Depending on how you have payments set up with the IRS, you may receive these monthly installments through direct deposit into your bank account or by a check in the mail.

These monthly installments began July of 2021 on the 15th of the month and subsequently each month after that. The monthly child tax credit installments will end after the final installment is deposited on Dec 15th of 2021.  

Part 2: One Stimulus Check for the Child Tax Credit

The other half of this credit will come during tax returns for the 2021 tax year. There is not a dedicated date set to receive the credit. The credit will be funded to you according to the IRS Refund Schedule after you have completed filing your 2021 tax returns. The sooner you file, the sooner you will receive the stimulus check for the child tax credit.  

Need Funds Sooner than the Deposit of Your 2021 Tax Returns?

Schedule an appointment with Check City to get your taxes filed today and ask for a Tax Refund Advance. Get your money now and pay when your tax returns are funded later. 

Future Child Tax Credit Stimulus Bill 

President Biden is trying to continue the child tax credit so that families can continue to receive a monthly child tax credit or stimulus checks child tax credit beyond the year 2021. A part of his Build Back Better Agenda is to continue these received payments in some way. President Biden is trying to pass a bill to make the increased tax credits permanent along with their monthly installments starting in 2022. Stay posted to see whether these payments will continue into the year 2022. 

In Conclusion, 

Taxes can be complicated, but they don’t have to be when you have your own tax filers and tax preparers to depend on. Make Check City your go-to place for tax preparation services and your taxes next year will be in the capable hands of professional filers. That way you’ll always know that you’re getting the tax refunds you deserve.