The Child Tax Credit stimulus check of $2,000 a year was expanded by President Biden under the American Rescue Plan Act. The ARPA increased the CTC from $2,000 to $3,000 per child for children between 6 years and 17 years and $2,000 to $3,600 for children below 6 years. The age limit was also changed from 16 to 17 years.
The American Congress passed legislation in March 2021 that significantly expanded the Child Tax Credit for a year under the ARPA, 2021. Both the amount of credit for 2021 and the eligibility for the stimulus check were expanded, mainly for low and moderate-income taxpayers.
Another significant change from the previous system of dispensing the amount was made under ARPA. The Treasury Secretary was directed to establish a program that advanced 50% of the total amount to be credited before the 2021 income tax returns were submitted.
This was a significant departure from almost all other tax benefits. They are without exception delivered every year in a lump sum only after the federal income tax returns are filed. These changes effected under ARPA were in vogue only for 2021, and they are no longer effective.
But some households will still receive a part, or the full expanded credit along with their 2021 income tax returns if they did not claim the monthly stimulus check issued between July and December 2021.
President Biden had sought to permanently extend the changes made under ARPA to the child credit. The proposals included making the total refundability provision made under ARPA permanent. He also sought to extend other provisions under ARPA through end-2025.
The Child Tax Credit stimulus check expansion under ARPA expired after 2021. The credit thus reverted to the parameters of the previous law.
ARPA effected three important changes in the CTC stimulus check that affected the amount to be credited, especially for low and middle-income taxpayers. The law also changed the way the credit was delivered to beneficiaries, albeit temporarily. These changes stayed in place through December 2021.
The Three Changes That Affected The Stimulus Check Amount For 2021 Are Detailed Below
The eligibility was expanded to 17-year-olds. The Rescue Plan increased the maximum age for eligible children by one year from the previous 16 years.
The Rescue Plan also eliminated the ACTC phase, which was based on earned income, and also eliminated the cap set at $1,400 per child. Thus, the 2021 child credit came to be fully refundable. The full value is thus available to otherwise eligible taxpayers with nil earned income. Taxpayers who do not works are also available under the changes made under ARPA.
Total refundability is enabled under normal circumstances to taxpayers living in the US for a minimum of 6 months in 2021. This is what is referred to as the principal place of the above requirements.
The maximum credit amount was also increased significantly, and a larger increase was effective for children up to 6 years. The original amount of $2,000 was increased to $3,600 a child for children below 6 years and $3,000 for children between 6 and 17 years.
The larger amount of credit and the full refundability increased the amount credited for low-income and middle-income families. They also received a larger credit amount because the eligibility age also included 17-year-old for the first time. The higher-income families also received the same benefit as under the previous law.
The Child Tax Credit stimulus check was the most significant move by President Biden. The resources poured in under the Rescue Plan Act significantly lowered the child poverty rate in 2021. But around 4 million people eligible for the assistance are yet to claim their amount.
The reason for this significant shortfall in the number of citizens who have accessed the child tax credit is the perceived complexity in applying for the benefit and also the lack of advice from the IRS. But this difficulty in applying has been sought to be simplified with the GetCTC.org website. This simplified tool is intended to bridge that significant gap.
November 15, 2022, Set As Deadline To Claim The 2021 Child Tax Credit Stimulus Check
Parents still have time to claim their expanded child tax credit stimulus check by November 15, 2022. It is a significant piece of good news as an estimated 4 million families are yet to claim the full amount or a part of it.
They should use the GetCTC.org toll and file the relevant information before the stipulated date to claim the stimulus check. Associate policy director Gabriel Zucker, at Code for America, looks after-tax benefits at this charitable organization. This organization created the CTC filing tool in collaboration with the treasury department and the White House.
Zucker said that it was essential that the applicant enter the details in the tool before the November 15 deadline.
The child tax credit expansion brought down childhood poverty from 9.7% in 2020 to 5.2% in 2021 as revealed by the Supplemental Poverty Measures of the US Census Bureau. It was the lowest recorded since the measure was first implemented in 2009.
The GetCTC.org tool is the simplest method to claim the child tax credit stimulus check for those who do not need to file their income tax returns. They can also use this tool to claim any missing part of the third stimulus check.
Families who have received the monthly payments under CTC stimulus checks can file a tax return to claim the balance payment. And those families who did not pick up the monthly stimulus checks can claim the whole amount which will add up to $3,600 for every child under 6 years and $3,000 for a child between 6 and 17 years.
The Code for American site revealed that filing an income tax return is the best way to claim the CTC payment even if the family has not filed their income tax earlier or received the monthly Child Tax Credit stimulus check last year.
The monthly payment under the CTC ended in December 2021 and a subsequent application is for the whole amount as a single payment.
