In 2021, the federal government provided an expanded child tax credit of $3,600. Many parents might have been unaware of this credit and could have missed receiving the payment if they didn’t file their taxes.
There is now an April 15 deadline for parents to claim this money before it is permanently returned to the Treasury.
Why It Matters
Former President Joe Biden introduced the American Rescue Plan in 2021, which raised the child tax credit from $2,000 to $3,000 for each child over the age of 6.
For parents with children under the age of 6, the child tax credit increased from $2,000 to $3,600. However, three years later, some individuals have yet to claim this amount.
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What To Know
A representative from the Internal Revenue Service informed Newsweek that taxpayers can still claim the expanded child tax credit for 2021, provided they qualified for it during that tax year.
The spokesperson noted that taxpayers can claim any tax benefit within a three-year period specific to the filing year they are submitting returns for.
However, April 15 is the deadline for parents to receive the credit.
After that three-year window, any refunds or credits available for a particular tax year are returned to the Treasury, meaning if you don’t file now, you could miss out on up to $3,600 from the government.
To qualify for the child tax credit in 2021, your child must have been under 18 at the end of that year and possess a Social Security number.
The taxpayer must have a relationship to the child or have legal guardianship. Furthermore, for 2021, the child must have lived with the taxpayer for over half the year and could not provide more than half of their own support.
There are also income requirements to meet depending on whether you filed as head of household or jointly as a married couple.
To file now, you will need Form 1040-X (the amended return) and include Schedule 8812.
What People Are Saying
Kevin Thompson, a finance expert and founder of 9i Capital Group, told Newsweek: “If you had children in 2021 and didn’t claim the expanded Child Tax Credit, you might still be eligible for that money. If you haven’t filed your 2021 return yet, you’ll need to do so to assess your eligibility. If you did file but missed claiming the credit, you may need to amend your return.”
Michael Ryan, a finance expert and founder of MichaelRyanMoney.com, stated to Newsweek: “It was genuinely one of those rare government programs that had an immediate impact. If you qualified but somehow overlooked claiming it on your tax return, there’s still time! You’ve got until April 15 of this year to file an amended return and reclaim potentially thousands of dollars.”
Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek: “Many Americans took advantage of the expanded child tax credit during the pandemic, but some were unable to access this benefit due to not filing in those years or because of other errors in the return process. While this affects a smaller group of taxpayers, it’s a significant credit for those who qualify that should be pursued if they didn’t receive it.”
What Happens Next
The IRS has indicated there is approximately $1 billion in unclaimed tax refunds from 2021, which will revert to the Treasury if returns for that tax year are not filed by April 15.
Even if you had no tax liability for 2021, filing now could result in a refund, according to experts.
“Last year, I spoke with a family who didn’t realize that their newborn in December 2021 made them eligible for the full $3,600. They thought that since they missed the advance payments, they had lost out entirely. When they submitted their amended return, it was like discovering money they never knew existed,” Ryan shared.
