$3,600 Child Tax Credit for 2021: 5 things you should know

March 17, 2021 0 By boss



Families with children in need of money will see some help soon. 


Millions of stimulus payments will make their way to the accounts of qualified Americans this week (here’s how to track your payment). Thethird stimulus check is part of President Joe Biden’s American Rescue Plan along with an expansion to the Child Tax Credit, which could provide families up to $3,600 per child. 

The expanded CTC was made official after Biden signed his $1.9 trillion COVID relief bill last Thursday. Families could receive more funds if they qualify, but the IRS has yet to provide guidance on when it will go into effect or how parents can receive the additional money if they already filled out a tax return. It’s also unclear on how the credit will be paid as the American Rescue Plan calls for funding to come via payments starting in July. Once the CTC is in full effect, it could reduce child poverty by 40%, according to a report from the Center on Budget and Policy Priorities.

Here’s everything you need to know about the CTC, including eligibility rules for you and your kids, how much money you could get and whether the benefit will become permanent. (Here’s every way caregivers can benefit from a new bill.) 

What is the Child Tax Credit?

At a basic level, the Child Tax Credit is a credit that parents and caregivers can claim to help reduce their tax bill, depending on the number and ages of their dependents. For many, it may provide a much-needed source of relief as part of a 2020 tax year refund

Previously, the CTC was a $2,000 credit parents could claim on their taxes for every child under the age of 17 (the same age range for child dependents that was used for the first and second stimulus checks). And if that credit exceeded the amount of taxes that a family actually owed, parents could still receive up to $1,400 of the balance as a refund; this is technically referred to as the Additional Child Tax Credit or refundable CTC. For example, a married couple with children ages 5, 10 and 12 would receive a total child tax credit of $6,000 — unless they were due a refund, in which case they’d receive $4,200.

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What’s changing under the new Biden’s bill? 

The American Rescue Plan will temporarily give more money to families. Here’s everything that changes:

  • Credits increase from $2,000 to $3,600 per child under 6 and $3,000 for children older than 6.
  • The credit would also be fully refundable.
  • Money from the credit will be split: Half will be paid through the tax refund and the other half will be paid monthly from July to December.
  • There is no $2,500 earnings floor.
  • Families in Puerto Rico can receive the credit.

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Am I eligible for the tax credit?

Families with kids under 6 will receive up to $3,600 per child under the new COVID relief bill. Families with children aged 17 and under will receive a credit of $3,000 per child. Families with older kids are also eligible: You can claim $500 for each child aged 17 and 18, or for full-time college students between the ages of 19 and 24.

The tax credit applies to children who are considered related to you and reside with you for at least six months out of the year.

Note that though the eligibility requirements are relatively broad, higher-income families may receive a reduced credit. But married couples filing jointly with an adjusted gross income under $400,000 are eligible for the full amount, as are individuals with an AGI under $200,000. 

The size of the credit will start to phase out for single people earning more than $75,000 a year, heads of household earning more than $112,500 a year and married couples earning more than $150,000 a year. 


With the Child Tax Credit for 2021, you could get more than one check this year.

Sarah Tew/CNET

Will the Child Tax Credit be based on my 2019 or 2020 tax return?

It will likely depend. The IRS will be tasked with basing your eligibility for the Child Tax Credit on your 2020 tax return, if that’s been processed by the first July payment. Otherwise — in the case of a tax return extension, for example — the agency would use your 2019 taxes to determine the amount you’re owed.

How long will the new Child Tax Credit last? Is it permanent?

The Child Tax Credit for 2021 is considered a temporary reprieve for the year and would last only through 2021. Any changes to a 2022 CTC would need to take place in a separate bill.

For more information, here’s everything in the 2020 stimulus bill, when the stimulus check could arrive and how to calculate how much money you’d get in a third check. Here is also how to track your payment and what we know about using direct deposit to receive your money.

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