Child Tax Credit Changes
Many of our clients have reported receiving a letter from the IRS regarding changes to the child tax credit and had questions, so we wanted to provide some clarity regarding those changes.
The American Rescue Plan Act, which was signed into law in March, expanded the child tax credit for 2021. The maximum credit amount has increased to $3,000 per qualifying child between the ages of 6 and 17 and $3,600 per qualifying child under the age of 6.
If you're eligible, you could receive part of the credit in 2021 through advance payments of up to:
The expansion of the credit also means it:
Important note: These advance payments will reduce the amount of the child tax credit you will receive on your 2021 income tax return. The IRS is currently working on a way to opt out of receiving these advance payments; however, as of June 17, 2021, this option is not yet available.