Omaha Star - Child Tax Credit - Oct. 2021
Earlier this year, Congress increased the amount of the 2021 Child Tax Credit, which helps offset the costs of raising children by reducing a family’s federal income tax. Those who qualify in 2021 will receive:
- $3,600 per child younger than 6.
- $3,000 per child between 6 and 17.
Half of this is being paid out in advance through automatic monthly payments that started in July. You’ll receive the other half when you file your 2021 tax return. If you’re not receiving payments, you didn’t automatically qualify but can still claim the full credit when you file if you’re eligible. This credit does not count as income and cannot be used to reduce your eligibility for other assistance, like food stamps or Medicaid.
Since some of the money is being sent to you now, you may receive a smaller refund than you’re used to when you file your tax return. If you rely on a big refund, you may want to adjust your plans or opt out of the monthly payments.
Additionally, if you’re receiving Child Tax Credit payments and don’t end up qualifying for the credit, you may need to pay that money back. The IRS is sending advance payments based on your previous tax returns and estimated eligibility. You may not qualify or your eligibility may be reduced if:
- Your child turns 18.
- You stop claiming a child as a dependent on your tax return.
- Your income increases.
If you have questions about the Child Tax Credit or would like to opt out of advance payments, go to irs.gov.
If you could use some financial advice, Veridian is here to help. We’re a not-for-profit credit union with branches in Council Bluffs, Omaha and Papillion. Simply call (800) 235-3228 and ask to speak to Alexandra to schedule a one-on-one consultation today.