Those who took advantage of the child tax credit in 2017 could claim a $1,000 credit on their income tax return for each child under 17 who qualified. In 2018, that doubled. In 2021, the American Rescue Plan Act expanded the credit even further to $3,600 for children under 5 at the end of 2021, and $3,000 for children aged 6 to 17 at the end of 2021. To qualify, children have to be 18 years or younger on the last day of 2021, be related to you, claimed as a dependent, be a documented U.S. citizen or resident, have lived with you for half of the tax year (though absences related to school, vacation, military service, and medical care are exempt) and must not provide more than half of his or her own support. The expanded credit is available for heads of household earning $112,500 or less (or $150,000 or less for married couples filing jointly).
Many taxpayers got Advance Child Tax Credit payments, which amounted to about half the credits they were eligible for based on 2020 income and dependents. These monthly disbursements began in July and continued through December. Taxpayers who got them must indicate it on returns and can’t claim the full credit. Those who didn’t get advance payments — for example, parents who had new infants in 2021 who weren’t reported on 2020 taxes — are eligible for the full credit.
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