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The Internal Revenue Service (IRS) reminded grandparents, foster parents, and other caregivers that may be eligible for up to a maximum of $3,600 per dependent through the Child Tax Credit (CTC).
In order to obtain the incentive, taxpayers must file a 2021 tax return by November 17.
“Eligible taxpayers who received advance payments of the Child Tax Credit last year must file a 2021 tax return to receive the second half of the credit. Eligible taxpayers who did not receive advance payments of the Child Tax Credit last year can claim the full credit by filing a 2021 tax return.
One of the potential recipients’ options is use the Interactive Tax Assistant to verify your eligibility. “Taxpayers who have not been eligible in the past should also check as they may now be eligible to claim the credit,” the agency warned.
If you are eligible and have income of $73,000 or less, you can submit your tax information for free through the Free File program from the IRS, available only on IRS.gov.
The CTC was expanded last year through the Economic Rescue Plan promoted by the Biden Administration.
The extension of the credit implies a maximum payment of $3,000 for each child between 6 and 17 years old and of $3,600 for each child under 6. “For example, a married couple earning less than $150,000 with two children under the age of 6 would be eligible for the $7,200 Child Tax Credit in 2021–about $3,200 more than they would have received before the ‘American Rescue Plan,’” the White House explained in a fact sheet on June 11.
Taxpayers can claim the Child Tax Credit for each eligible child who has a Social Security number.
To qualify for CTC, your dependent must be under the age of 18 at the end of the year. Also, must be your child, stepchild, eligible foster child, sibling, stepsiblinghalf-sibling, or a descendant of one of these (for example, a grandchild or nephew). You must provide no more than half of the dependent’s financial support during the year. dependent must also have lived with you for more than half of the year and be duly claimed as such on the tax return.
Another requirement is to be a US citizen or a national citizen or resident alien in the US and not file a joint return with a spouse for the tax year or file alone to claim a refund of income tax withholding or estimated tax payments.
Regarding income, the same levels established in the economic rescue law for the distribution of the third stimulus check $1,400 will determine the amount of money per household under the “Child Tax Credit” extension.
If you file as single and your adjusted gross income (AGI) on your tax return is $75,000 or less, you will receive the full amount of the payment. In the cases of heads of household, they must have earned $112,500 or less; while married couples filing jointly must not exceed $150,000 AGI.
Beyond those thresholds, for every $1,000 that your income exceeds the established tax bracket limit, the CTC amount is reduced by $50.
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