The enhanced Child Tax Credit (CTC) in 2021 was more generous than in previous years because of the American Rescue Plan. The IRS announced that it’s not too late to claim these credits if you haven’t already. Optima Tax Relief details the guidelines for this credit.
Eligibility
An estimated 4 million eligible taxpayers still have not claimed this credit as of the beginning of 2022. To claim the Child Tax Credit, taxpayers must file a tax return. Taxpayers can claim the credit even if they did not earn any income. In fact, these taxpayers are strongly encouraged to claim the tax credit as it could result in life-changing sums of money upwards of $10,000. Qualifying children under age 6 will earn a credit of $3,600 while those aged 6-17 will earn a credit of $3,000. This credit is available to all taxpayers in the United States, including Puerto Rico and U.S. territories.
How to Claim the Child Tax Credit
The simplest way to claim the credit is using Code for America’s online GetCTC tool. Code for America is an organization that has partnered with The White House and the U.S. Treasury Department to assist families claiming the Child Tax Credit as well as any missing Economic Impact payments.
If a taxpayer received monthly CTC payments in 2021, they will only receive the remaining amount they are eligible for. For example, if the taxpayer originally qualified for a $3,600 credit but received $1,800 in monthly CTC payments in 2021, they will receive the remaining $1,800 in a one-time payment. If a taxpayer did not receive any monthly CTC payments in 2021, they will receive the entire qualifying amount in one payment.
The most important piece of information surrounding this tax credit is the November 15th deadline if taxpayers plan to use Code for America’s simple GetCTC tool. To be clear, this credit can still be claimed after the November deadline, but with more steps involved. Taxpayers will be able to claim the credit for up to three years after the initial due date.
