Child tax credit 2020 changes
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If you receive too little, you will be due an additional amount on your tax return.Most families will receive about one-half of their tax credit through the advance payments.The amount that you receive will be reconciled to the amount that you are eligible for when you prepare your 2021. Eligible families will receive advance payments, either by direct deposit or check.Normally, the IRS will calculate the payment amount based on your 2020 tax return.
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Most families do not need to do anything to get their advance payment.Part of this expansion is to advance the 2021 tax credit to families by sending them direct payments during 2021 rather than having them wait until they prepare their 2021 taxes in 2022. The Child Tax Credit has been expanded by the American Rescue Plan Act, that was enacted in March of 2021. New, Temporary Advance Child Tax Credit Payments This means that eligible families can get it, even if they owe no federal income tax. In addition, the entire credit is fully refundable for 2021.Families that do not qualify for the credit using the revised income limits are still eligible for the $2,000 per-child credit using the original Child Tax Credit income and phase-out amounts. The Child Tax Credit changes for 2021 have lower income limits than the original Child Tax Credit.Before 2021, the credit was worth up to $2,000 per eligible child, and 17 year-olds were not eligible for the credit. The American Rescue Plan raised the maximum Child Tax Credit in 2021 to $3,600 for qualifying children under the age of 6 and to $3,000 per child for qualifying children ages 6 through 17.Stimulus impact on the Child Tax Credit for 2021