This blog post is intended to provide informational content regarding the child tax credit. Please refer to federal, state and local government websites for official and up-to-date information regarding the child tax credit.
Changes to the Child Tax Credit will help many families receive advance payments of the child tax credit starting this summer.
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If you and your family are eligible, update the IRS with your direct deposit information for your Bridge account!
- For 2020, the child tax credit is an income tax credit of up to $2,000 per eligible child (under age 17) that may be partially refundable.
- For 2021, the credit is $3,000 (children under age 18) or $3,600 (children under age 6) per eligible child for American taxpayers for 2021; it is fully refundable and can be received as advance payments.
- Eligible children are legal dependents who are U.S. citizens, U.S. nationals, or U.S. resident aliens.
- The increased, fully refundable $3,000 & $3,600 annual credits are currently only provided for 2021.
What is the child tax credit?
The child tax credit is a tax benefit granted to American taxpayers for each qualifying dependent child and is designed to help taxpayers support their families.
What changes have happened with the child tax credit?
The child tax credit increased. The maximum annual credit was $2,000 per child under age 17 in 2020. Now, the maximum annual credit is $3,000 per child under age 18 and $3,600 per child under age 6. While the 2020 credit was partially refundable, the 2021 credit is fully refundable.
What does this mean for families who qualify?
The IRS will pay half the total child tax credit amount in advance monthly payments beginning July 15, 2021. Eligible families will claim the other half when they file their 2021 income tax return. These changes apply to tax year 2021 only.
What do I need to do?
If your family qualifies for the credit and wants to receive advance payments as early as possible, confirm that the IRS has updated direct deposit information for your Bridge account. You can also include your account information on your 2020 tax return to benefit from direct deposit, which will be much faster and easier than paper checks. The name on the direct deposit form must match the name on your Bridge account for funds to be deposited.
You also may be able to use an online portal planned by the IRS to collect and update taxpayer information for the 2021 advance payment program. The portal should be available here sometime in July, per the IRS.
The child tax credit can either come in monthly payments or can be claimed as a lump sum when filing 2021 taxes. If you generally owe money to the IRS when you file taxes, you may want to opt for the lump sum next year, instead of getting monthly credits in advance.
Visit this IRS resource page for more details, to submit your information, and (available soon) for tools to manage or unenroll from the advance child tax credit. This page remains updated with the most recent resources and information.