Who Qualifies For The Child Tax Credit And How Much Money Will You Get?

With the expanded child tax credit set to begin distributing funds to families within a matter of weeks, the IRS is trying to reach as many people as possible with the plan’s details. The current expansion only lasts through 2021, but Joe Biden and congressional Democrats are laying the groundwork to keep it for years to come.

Monthly payments are set to begin July 15. They’ll be distributed in the same manner as COVID-19 relief checks, sent through the mail or directly deposited into the recipient’s bank account.

Eligibility is also decided in a similar manner: The IRS will find recipients through 2020 tax returns, making it especially important that they are filed. This has been a focal point of outreach efforts, as the families most in need of assistance have incomes low enough to make filing tax returns in normal years unnecessary.

The typical full tax credit is $2,000 annually per child. Under March’s relief bill, 2021’s credit has been increased to $3,000 with a further $600 for children under 6.

The funds diminish for families with higher incomes. They phase out by five cents per dollar above $75,000 for individuals, $112,500 for heads of households and $150,000 for married couples filing jointly or widows/widowers.

As a “refundable” tax credit, the money is available to all eligible filers even if they don’t make enough money to pay taxes.

The credit may also wind up sticking around well past 2021. Biden has said he plans to extend it for a further four years, and congressional Democrats are hinting they’d like to go even further. While expanding the credit has made it onto the list of liberal policy goals, it’s sure to face steep Republican opposition in the razor-thin margins of Congress.