1. Who qualifies for the expanded child tax credit?
Have the rules changed for people making over these amounts who normally qualify for the $2,000 tax credit?
Parents who are single receive the full $2,000 per child if their income is less than $200,000.
This post refers to child tax credit payments issued in 2021. For the most up-to-date info, check out ourrecent tax articles.
For incomes above these limits, the credit gradually phases out.
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When will we receive the payments?
Half of the credits will be sent out in monthly installments between July and December.
Parents would receive the remaining half as a tax refund when they file their 2021 tax returns next year.
What tax returns are the payments based on?
Because payments wont begin until July, theyll be based on your 2020 tax return.
Technically, though, theyre anadvance on a tax creditfor 2021.
The stimulus checks worked exactly the same way.
The first two checks were an advance on a 2020 tax credit that were based primarily on 2019 income.
The parent who claims the child on their 2020 tax return will receive the credit.
If Parent B claimed the child for 2020, theyll receive $1,100 as a tax refund.
Would babies born in 2021 qualify?
Will I have to pay back the credit if Im eligible for less based on my 2021 taxes?
The bill increases the age limit for child tax credits from 16 to 17.
Do you need earned income to get the credit as a refund?
To get that refund, you need at least $2,500 of earned income.
You wont need earned income to receive the refund.
Are these changes permanent?
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder.
She writes the Dear Penny personal finance advice column.
Send your tricky money questions to[email protected].
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