Higher income limits mean more families may be eligible for the Child Tax Credit or the Credit for Other Dependents. Both credits begin to phase out at $200,000 of modified adjusted gross income ($400,000 for married couples filing jointly), compared with 2017 levels of $75,000 for single taxpayers and $110,000 for married couples filing jointly.
2021 Brought some very impactful, but currently temporary changes to the Child Tax Credit:
Advanced Child Tax Payments:
- Many families received up to $300 for each child under 5 and $250 for each child under 18. These payments typically began in the summer and ended in December.
- The Payments were calculated based on the most recently filed tax return, or with the non-filer tool.
- The total amount of Child Tax Credit is adjusted by the amount you received early. In order to properly file your return, you must reconcile the amount you received. This amount is disclosed on IRS letter 6419.
- If you do not properly reconcile the amount you received, your return may be delayed.
- If you did not receive Advanced Child Tax Credits, or if the payments were smaller due to income fluctuation, your 2021 tax return will recapture the missed credit and add it to your refund.
- If you received Advanced Child Tax Credits you were not entitled to, you may have to repay all or part of the funds you received.
- Currently, the increased amounts and advance payments were only authorized for 2021. Future Child Tax credit payments will revert to 2017 rules unless Congress enacts new laws.
Use the IRS’s Interactive Tax Assistant to see if you’re eligible to claim the Child Tax Credit or Credit for Other Dependents.