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The American Recovery Act, signed by President Biden in March, made changes to the Child Tax Credit (CTC),  a credit given to families with children or other dependents. This article explains the changes to the 2021 CTC.

The CTC is now fully refundable. This means if your CTC is larger than the amount you owe, you receive the difference. For example: If you owe $1,000 in taxes and qualify for a $2,500 credit, you will get a refund of $1,500.

The amount of the CTC has been increased. The CTC increased from $2,000 per child in 2020 to $3,600 per child under age 6 in 2021. For children between the ages of 6 and 16, the CTC increased from $2,000 to $3,000. It also makes 17-year-olds eligible for the $3,000 credit.

The Advanced Child Tax Credit. To get money to families quickly, the IRS is sending out half of the 2021 Child Tax Credit in monthly payments beginning on July 15. Up to half of the eligible amount is distributed in this manner. The remainder will be claimed when you file your 2021 taxes. You do not have to file paperwork or take other action to receive the CTC. You should receive the funds via direct deposit, check or debit card.

No minimum income requirement to qualify. In 2020, to qualify for the CTC, you needed to have a minimum earned income of $2,500. In 2021, there is no minimum income to qualify. For example, if you are receiving only general assistance, you may qualify for the CTC.

As a result of these changes, more people will qualify for the CTC and the amounts will be higher this year. Note that the IRS will calculate the payment amount based upon the return you filed for 2020. This is an advance payment for 2021. The amount you get this year will be compared to how much you claim on your 2021 return, and differences will be corrected on your 2021 tax return.

If you have questions about your CTC, go to a special portal the IRS has created: Child Tax Credit Update Portal. Here, you can check to see if you are enrolled to receive your credit, provide or update bank
information, request that advanced payments be stopped, and file a tax return if you have not filed yet.

For other questions, call the Internal Revenue Service at 1-800-829-1040. ​

This information last reviewed: Oct 8, 2021