Child Tax Credits 2021 – What you need to know
Early CTC payments were seen starting in July of 2021 in lieu of additional stimulus payments. These payments were up to $300 a month; depending on the child’s age and income limitations of the tax payer. The final payment is scheduled to go out in December.
The child tax credit was increased in 2021 from $2,000 for children under the age of 17. This amount went up to $3,600 for children up to 6 years of age and $3,000 for children up to age 18.
These monthly credits will be subtracted from the amount claimed on your 2021 tax return. After a reconciliation on your tax return, you will receive the remainder as your credit on your return if you are eligible.
You may see a decrease in your refund.
This is due to the fact that most taxpayers claimed the full $2,000 at year end and since some was received through the year. This will result in a smaller credit on your return, in turn reducing refunds or increasing balance dues.
If you did not receive the advanced payments then you will claim the full amount of the CTCs on your 2021 tax return. This is for the children you are claiming on the 2021 tax return.
If you did receive the advanced payment and you are not claiming the child the payments were based on, you may have a repayment requirement if your income is above a certain dollar amount.
Make sure to keep track of home much you have received per month. You report this on your tax return. The IRS will be sending a tax form for your tax return, also. The IRS is reporting these forms to be sent out on 1/19/2022.