The new federal child tax credit is taking effect on July 15, 2021. The new federal child tax credit was a part of the last stimulus package signed by President Joe Biden in March 2021 called the American Rescue Plan Act.
The American Rescue Plan Act was the latest law passed to help families get through the global pandemic that has been impacting businesses and families since March of last year.
The plan expands the current child tax credit from $2,000 to $3,600 for children under 6 and to $3,000 for children ages 6 to 17. To qualify for the full increase, households much earn less than $75,000 for single taxpayers and $150,000 for couples. The amount of the tax credit increase is reduced by $50 for every $1,000 earned over the limits phasing out at $95,000 for individuals and $170,000 for couples.
People who do not qualify for the expanded child tax credit can still claim the base child tax credit of $2,000 per child.
Child tax credits are being sent to most taxpayers via direct deposit. If the IRS does not have a bank account on file, they will send out checks.
If you have any questions about the Child Tax Credit, please call our office.