‘How much child tax credit can I get?’ is the question many people have. It is exciting to see that the American Rescue Plan offers more benefits to taxpayers when compared to 3rd stimulus payment. This plan came into existence on 11th March 2021. It has a significant update that affects the child tax credit.
Many people do not have much knowledge about this tax credit. Here, in this blog, we will break everything down so that you can understand it clearly. Read this article to see if this is something that you want to consider using.
What Exactly Is This Tax Credit
It is a tax credit that parents who are having dependent children can use.
How Much Child Tax Credit Can I Claim?
How Much Child Tax Credit Can I Claim? It is one question that is haunting many.
The worth of the child tax credit for the tax year 2020 is $2000 for every eligible dependant. Dependant should be under the age of 17 years before the year-end.
This credit is partially refundable. It is going to phase out when the Adjusted Gross Income (AGI) is above $200,000. If a married couple is filing it jointly, it will phase out if the AGI is above $400,000.
The child tax credit is almost 100% refundable for the tax year 2021. The amount you can claim can rise up to $3000 per dependant (ages 6 to 17) if you meet specific criteria.
If the dependent is below six years, you can claim upto $3600. If your AGI is above $75,000, the additional amount of $1000 or $1600 will begin to phase out. If married and filing tax returns jointly, this will affect you if your AGI is $150,000.
Original $2000 will not phase out unless your Adjusted Gross Income (AGI) is above $200,000. If a married couple is filing it jointly, it will phase out only when your AGI is above $400,000.
You must understand that all the eligible dependants are directly related to you and should be residing with you for more than six months to enjoy this benefit. They should also be American citizens or should be U.S. resident aliens or U.S. nationals.
For example, for the tax year 2021, a married couple with an AGI of $90,000 can get a child tax credit of $3000 if the dependent is 9 years.
Can I Get This Credit If I Don’t Owe Any Taxes?
For the year 2021, to become eligible for this tax credit, you don’t need to owe any taxes. You can receive this credit just like the stimulus check. This year, it is a refundable credit, unlike the earlier year, wherein it was both refundable and nonrefundable, depending on your situation.
If you are unsure how you should proceed to get this credit, contact a professional tax preparer with vast knowledge and expertise. They will assist you in obtaining this tax credit if you are eligible.
Hopefully, this article did help in answering the question, ‘How much child tax credit can I get?’