Do You Qualify For The $3,600 Child Tax Credit?

If you have a child, you may qualify for this $3,600 child tax credit.

Here’s what you need to know.

Child Tax Credit

The American Rescue Plan Act of 2021, a $1.9 trillion stimulus package, includes a monthly child tax credit that could benefit you and your family. Let’s see if you qualify:

How much is the child tax credit?

For children under age 6, you can get up to a $3,600 cash allowance, which is a $300 check every month. For children ages 6 to 17, you can get up to a $3,000 cash allowance, which is up to a $250 check every month.

Who is eligible for the child tax credit?

To get the $3,600 or $3,000 child tax credit, there are certain income limitations. Above these adjusted gross income thresholds, the child tax credit will begin to phase out:

Single Filer: $75,000

Head of Household: $112,500

Married/Joint: $150,000

For every $1,000 of adjusted gross income above these thresholds, the amount of the tax credit is reduced by $50. For example, if your income is $5,000 more than the income threshold, the amount of your credit would be reduced by $250 (or $50 x 5).

What are the other requirements for the child tax credit?

There are several other requirements to ensure that your child qualifies for the monthly child tax credit, including, but not limited to, that your child is a U.S. citizen or resident and has a valid Social Security Number. You also must be able to claim the child as a dependent on your 2021 tax return. Your child also must live with you for at least half the year.

When will I get the child tax credit?

Monthly payments for the child tax credit will be paid in advance and are expected to begin in July 2021. For 2021, therefore, you would get a check each month from July to December 2021. This is similar to the idea of a monthly stimulus check, although Congress hasn’t passed one. However, several members of Congress have proposed a $2,000 stimulus check every month until the end of the Covid-19 pandemic.

Is this child tax credit permanent?

No, this is a temporary expansion of the child tax credit as a result of the American Rescue Plan Act of 2021, which President Joe Biden proposed to help Americans in the wake of the Covid-19 pandemic.

Do 17-year-olds qualify for the monthly child tax credit?

Yes, 17-year-olds now qualify for the enhanced monthly child tax credit. This has been a point of confusion because traditionally, the child tax credit is available to children 16 and younger. For the first stimulus check, for example, only dependents 16-years-old and younger were eligible for dependent payments. The new child tax credit expands eligibility to children 17 and under.

Can I still get a $2,000 child tax credit?

If you have higher income, you can still get the $2,000 child tax credit. To qualify, single filers must have income less than $200,000 and married / joint filers must have income less than $400,000. However, you can’t get both a $2,000 child tax credit and either a $3,000 or $3,600 child tax credit.

Do you have to be employed to earn the enhanced child tax credit?

No.

What’s the minimum income to get the child tax credit?

There is no minimum earned income. Previously, you had to earn at least $2,500.

Is the child tax credit a refundable tax credit?

Since this is a tax credit, it reduces your income dollar-for-dollar.

How are monthly payments for the child tax credit calculated?

The IRS will base the monthly payments, age of children and number of children on your most recently filed tax return. For most people, that means your 2020 tax return. If you didn’t file a 2020 tax return, then it would be your 2019 tax return.

What if I need to update information regarding the child tax credit?

The IRS is expected to launch an online portal by July if you need to update any information regarding your child tax credit.

Will this child tax credit become permanent?

Currently, this enhanced child tax credit is temporary. Congress could, however, make this child tax credit permanent.

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