Jack Woods

 

Central Business Solutions 

301 Lynnfield Street, P.O. Box 3169 Peabody, MA 01960

 

Phone:  978-532-0266

Fax:      978-532-9105

 

1147 Main Street, Suite 213, P.O. Box 299 Tewksbury, MA 01876

 

Phone: 978-851-8044

Fax:     978-851-9332

 

Email: jack@cbps.com

May 2021

Big Changes to Child Tax Credit

Big Changes to Child Tax Credit

The American Rescue Plan Act, signed into law in March 2021, made significant changes to the child tax credit for 2021 only -- unless Congress extends these changes.


OLDER CHILDREN COVERED
The tax credit now includes children who are age 17 as of December 31, 2021.


INCREASED AMOUNT
The credit amount increased from $2,000 to $3,000 per child aged 6 to 17 and $3,600 for children under age six, as of December 31, 2021.


ELIGIBILITY
Calculating the total credit is difficult, because there are two phaseout rules that apply. The credit is reduced—or eliminated—for parents who earn above a certain amount. Your tax professional will be able to calculate how much, if any, tax credit you might receive.


ADVANCE PAYMENTS
The IRS will estimate your child tax credit for 2021 and half of it will be paid to you in monthly installments from July through December 2021.


The remaining amount due to you will be credited when you file your 2021 tax return. However, if you file your 2021 tax return and the advance payments you received exceeded your actual credit, with a few exceptions for low and moderate-income taxpayers, you’ll have to repay the excess.


SUBSCRIBE

Enter your Name and Email address to get
the newsletter delivered to your inbox every month.


CONTACT US

Enter your Name, Email Address and a short message. We'll respond to you as soon as possible.

The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.