Clinton Refugee Family Child Care Microenterprise Development Grant Recipients
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What is the child tax credit?
The child tax credit, or CTC, is an annual tax credit bachelor to taxpayers with qualifying dependent children. It was first introduced as part of the Taxpayer Relief Human action of 1997 and has played an important role in providing financial back up for American taxpayers with children.
The tax credit — normally up to $two,000 per qualifying dependent — was expanded to a maximum of $iii,600 in 2021 as role of the American Rescue Program (the coronavirus relief package that took effect in March). And, for the first time in U.Due south. history, many taxpayers besides received half of the credit as advance monthly payments from July through December of 2021.
Nerdy tip: By the end of Jan, all recipients of the advance kid tax credit payments should receive Letter 6419, which will provide a breakdown of all the advance payments disbursed to you. The IRS has asked taxpayers to use the letter to reconcile the credit on their 2021 returns. If you suspect your Letter 6419 states an inaccurate accelerate payment total, the IRS advises visiting your IRS online account for the most up-to-appointment information.
Who qualifies for the child tax credit?
For the 2021 tax year, you can accept total reward of the expanded credit if your modified adapted gross income is under $75,000 for single filers, $112,500 for heads of household, and $150,000 for those married filing jointly.
The credit begins to phase out above those thresholds.
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Kickoff phaseout: Income exceeds the in a higher place thresholds but is below $400,000 (married filing jointly) or $200,000 (all other filing statuses) . Your total credit per kid tin can be reduced past $50 for each $one,000 (or a fraction thereof). This phaseout volition not reduce your credit below $2,000 per kid.
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Second phaseout: Income exceeds $400,000 (married filing jointly) or $200,000 (other filing statuses) . The phaseout will continue docking $50 per each $1,000 and begin to reduce your credit per kid beneath $2,000. You may be butterfingers from the credit altogether.
Some of the other eligibility requirements for the child tax credit include:
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You must have provided at least half of the child's support during the last yr, and the kid must have lived with y'all for at least half the year (there are some exceptions to this dominion; the IRS has the details hither ).
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The kid cannot file a articulation tax return.
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You must take lived in the U.South. for more than one-half the year (or, if filing jointly, ane spouse must have had a main habitation in the U.S. for more than half the year).
How much you can go per child
For the 2021 tax yr, the child taxation credit offers:
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Up to $three,000 per qualifying dependent child 17 or younger on Dec. 31, 2021.
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Up to $3,600 per qualifying dependent kid nether 6 on December. 31, 2021.
If you took advantage of the advance payments, the IRS near likely sent half of the credit in the grade of monthly payments from July through December of 2021. Those with qualifying dependents 17 or younger might take received upwardly to $250 monthly per qualifying dependent and those with children 5 or younger might take received upwardly to $300 monthly per qualifying dependent.
How the child tax credit will affect your taxes
For the 2021 tax yr, the CTC is fully refundable — that is, information technology tin can reduce your tax neb on a dollar-for-dollar ground, and you might be able to go a tax refund check for anything left over. How much of the credit you merits on your 2021 return will depend on whether you opted in for accelerate payments, how much you received every bit an advance, also equally your taxation-filing circumstances.
If you lot received advance payments
Letter of the alphabet 6419 contains a detailed summary of the money you received from the advance CTC payments. It too confirms the number of qualifying dependents the IRS used to calculate those advance payments. This information will help you to reconcile the credit when you file your render.
If you opted out of advance payments
If you opted out of the advance payments before the first one was disbursed in July, claiming the credit on your return will likely be much simpler. When yous file, yous'll merely confirm that you're eligible for the credit and and so claim the full amount you're entitled to based on your 2021 income and number of qualifying dependents.
If you don't commonly file taxes
Depression-income families who may non normally file a taxation return had the option to sign up for advance payments using the IRS's not-filers sign-up tool. To claim the balance (or the total credit if you didn't receive the accelerate payments), yous'll need to file a return this year.
Volition y'all have to pay back the kid taxation credit?
First, some good news. The kid tax credit is not considered taxable income. Information technology's a credit, which means information technology tin can lower your taxation neb or potentially result in a refund. Nevertheless, things get a piddling catchy if information technology turns out that you were overpaid on your accelerate payment.
The advance payments were a prepayment of the 2021 tax credit y'all would normally claim in full during filing season. But because half of the credit was sent out early, the IRS likely used your most recent taxation return (2020 or older) to make up one's mind how much of an accelerate to send you each calendar month. So, if your financial or personal circumstances (such as your filing status, income, custody arrangements or residency status) have changed in 2021, there'southward a chance you might accept received more of an advance than you're really eligible for. A few ways this could play out:
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Let'southward say you lot received advance payments totaling $1,500 for your qualifying dependent based on your 2020 income. Withal, your income has increased significantly in 2021, making you eligible just for a reduced credit. The excess paid out to you is considered an overpayment.
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Another example: Yous're a single filer with one dependent who lived in the U.Southward. in 2020. The IRS then sent yous advance payments based on that information, which you accepted. Nonetheless, in 2021, yous actually lived outside of the U.S. for more than half the year, making you ineligible for the child tax credit. Accepting the payment would also be considered an overpayment.
If it turns out that y'all were given more of an accelerate than yous were eligible for, you lot'll need to written report information technology every bit additional income tax to the IRS on your 2021 return. That boosted income taxation will either reduce your refund or potentially increase your revenue enhancement neb.
Some people who were overpaid may also exist eligible for repayment protection, pregnant they won't need to repay the IRS. Y'all can learn more about who qualifies on the IRS website . If you're unsure how to reconcile your credit or believe you may have been overpaid, quality tax software or working with a professional tax preparer can assist yous to reconcile your credit before the revenue enhancement-filing deadline .
Frequently asked questions
I had a baby in 2021. Am I eligible for the CTC?
Yes. Parents of newborns in 2021 are eligible for the child revenue enhancement credit. You can claim the credit when you lot file your 2021 render.
The child tax credit update portal shows that a payment was issued, but I didn't receive information technology. What steps do I take?
If the child tax credit update portal and your IRS online account show that y'all were issued a payment that you did not actually receive, y'all tin call the IRS to report the missing payment and asking a trace at 800-908-4184 (7 am to 7 pm local time).
The bureau urges yous to accept the following information on hand when y'all phone call: the payment date, payment method, status, and the amount listed in the CTC update portal.
If the IRS determines that the payment was not received by you lot or returned to the agency, the IRS will update its records, and those who are eligible tin merits the missing amount on their 2021 return.
Are the advance child taxation credit payments permanent?
No. Legislation to extend the enhanced credit amount and advance payment construction has not been passed. For at present, the kid tax credit for the 2022 revenue enhancement twelvemonth will revert back to its original max of $ii,000 per qualifying dependent.
Is the kid tax credit taxable?
No, the child revenue enhancement credit is not considered income and therefore is not taxable. However, if the IRS overpaid you (i.e., the corporeality you received is more than than y'all can merits), you may demand to reconcile the overpayment on your 2021 tax render.
I had a infant in 2021. Am I eligible for the CTC?
Yes. Parents of newborns in 2021 are eligible for the child revenue enhancement credit. You can claim the credit when yous file your 2021 render.
The child tax credit update portal shows that a payment was issued, but I didn't receive it. What steps practice I have?
If the child tax credit update portal and your IRS online account show that you were issued a payment that you did not actually receive, you can telephone call the IRS to study the missing payment and request a trace at 800-908-4184 (7 am to 7 pm local time).
The bureau urges you to have the following information on hand when you lot phone call: the payment date, payment method, status, and the amount listed in the CTC update portal.
If the IRS determines that the payment was not received by y'all or returned to the agency, the IRS volition update its records, and those who are eligible tin merits the missing amount on their 2021 return.
Are the advance child tax credit payments permanent?
No. Legislation to extend the enhanced credit amount and accelerate payment structure has non been passed. For now, the child revenue enhancement credit for the 2022 tax twelvemonth will revert back to its original max of $2,000 per qualifying dependent.
Is the child revenue enhancement credit taxable?
No, the child tax credit is not considered income and therefore is not taxable. Notwithstanding, if the IRS overpaid you lot (i.e., the corporeality you received is more than than y'all tin merits), yous may demand to reconcile the overpayment on your 2021 tax render.
Estimate your kid taxation credit amount
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Source: https://www.nerdwallet.com/article/taxes/qualify-child-child-care-tax-credit
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