The American Rescue Plan Act (ARP), which the Biden administration passed, temporarily increased the Child Tax Credit (CTC) for 2021, making it the greatest child tax credit in American history. The CTC has been reduced to its initial $2,000 per kid for the 2022 taxation year. However, you can still deduct the increased 2021 credit from your taxes in 2023.
The Increased Child Tax Credit
The GetCTC.org filing tool’s deadline for tax credit claims was November 15, and the IRS’s Free File program’s deadline was November 17. However, individuals and families who missed either of these deadlines still have up to three years to file their tax returns and collect any possible 2021 tax credits, according to Roxy Caines, director of the Center on Budget and Policy Priorities’ EITC campaign (per CNBC).
There is still time left, according to Caines. Through Tax Day 2025, people can submit tax credit claims if they qualify. Families must meet eligibility conditions and file their 2021 taxes to benefit from this year-long enhanced child tax credit.
The increased CTC allowed most working households to claim $3,000 for each child under the age of 18 and $3,600 for each child under the age of six. Additionally, the ARP fully restored the credit’s refundable nature and gave lower-income families the option of paying off half the credit through six monthly installments.
Families That Are Struggling
ChildTaxCredit.gov states that in 2021, all eligible families could be able to get the full credit if they earned up to $112,500 for a family with a single parent or $150,000 for a married couple. Families struggling to meet their children’s fundamental requirements will be significantly impacted by the return to payments from before the outbreak.
According to ChildTaxCredit.gov, the CTC boosted the fight against escalating child poverty and assisted low-income families in reducing their insecurity for food by 25%. Many state governments have implemented their own CTC laws and have distributed direct payments to help struggling families in reaction to federal delay, reports Yahoo.
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