How much money will you get with the child tax credit stimulus

President Biden’s $1.9 trillion coronavirus aid package includes a massive one-year increase to the Child Tax Credit. The expansion could benefit as many as 83 million children and reduce the number of children living in poverty by more than 40 percent, at least temporarily.

See how much you could receive under the expanded credit:

Estimate your 2021 Child Tax Credit

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Half of the tax credit would be paid out in monthly checks, beginning in July. Because the payments don’t start until the summer, they will be based on 2020 income for most taxpayers.

[Calculate how much you would get from the $1,400 (or more) coronavirus checks]

The other half of the credit will be applied to income taxes at the end of the year, and the full remainder refunded to families. In previous years, the entire CTC was applied to income taxes at the end of the year.

Under the one-year expansion, families would receive more money per child than under existing law, except for dependents 18 years and older.

Maximum tax credit, by dependent age

In the past, many lower-income families did not benefit from the full tax credit because they owed too little in taxes. This is because it was partially refundable: Some of it could only go to paying back income tax. Under the expansion, the credit will become fully refundable, meaning families will receive the full CTC amount regardless of how much they owe in income taxes.

[Child tax credit: What you need to know]

The stimulus bill only expands the Child Tax Credit for one year, but Democrats hope to make the program permanent.

About this story

These figures are estimates, and individual filers receive different credit amounts due to their unique tax situations. Only dependents with a social security number are eligible for the credit. Additional analysis from Erica York and Garrett Watson of the Tax Foundation.

Read More: How much money will you get with the child tax credit stimulus

2021-03-06 20:37:59

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