The American Rescue Plan Act of 2021 expands the Child Tax Credit (CTC) for 2021 only. For tax year 2021, families claiming the CTC will receive up to $3,000 per qualifying child between the ages of 6 and 17 at the end of 2021. They will receive $3,600 per qualifying child under age 6 at the end of 2021.
It also authorizes monthly “child allowance” payments to families from July to December. Half the total credit amount will be paid in the monthly payments, while the other half will be claimed on the tax return that you’ll file next year.
The amount a family receives each month will vary based on the number of children in the family, the ages of the kids and the amount of the family’s adjusted gross income. You can calculate your monthly payment using Kiplinger’s 2021 Child Tax Credit Calculator.
Payments will be directly deposited into bank accounts on the 15th day of the month from July through December. Families for which IRS does not have bank account information could receive paper checks or debit cards in the mail. Want to find out more? Click the link for additional information on the Child Tax Credit: https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021.