Get Your Child Tax Credit for 2020 and 2021

What is the Child Tax Credit?

The Child Tax Credit is a refundable tax credit which applies to any qualifying child under 18. As a tax credit, it reduces your tax bill on a dollar-for-dollar basis. Because the Child Tax Credit is refundable, it may be what you need to reduce your tax bill to zero. Perhaps you will be able to receive a tax refund check from anything left over!

How to Qualify for the Child Tax Credit (2020 Tax Year)

Whether or not you can take advantage of the CTC depends on your adjusted gross income (AGI). Taxpayers who are "married filing jointly" must have an AGI of under $400,000. All other taxpayers need an AGI of under $200,000 to qualify.

Due to the COVID-19 pandemic, special rules are put into place for the 2020 tax year. The IRS is allowing Americans to choose whichever filing allows them to benefit from the largest Child Tax Credit. You can use your 2019 income or your 2020 income to calculate your tax credit.

If you are using a tax professional, be sure to ask them to check both! You can set up a one hour free consultation with Yoke Taxprofessionals today. We will crunch the numbers and maximize your return in three days or less.

Another restriction on the CTC is the qualifying age of the child. In the 2020 tax year, the child must be 16 years old or younger by December 31, 2020. Dependents who are older than 16 cannot be counted towards a CTC in your tax forms.

The maximum Child Tax Credit for 2020 is $3,000.

Getting the Child Tax Credit (2021 Tax Year)

Qualifying for the Child Tax Credit in the 2021 tax year is slightly different from the 2020 tax year. Most notably, there are more specified limits on AGI for different taxpayer types.

The AGI of married filing jointly taxpayers must be under $150,000 for the 2021 tax year. Single filers have a $75,000 AGI limit, and head of household taxpayers hold a $112,000 AGI limit.

For the 2021 tax year, the qualifying age of the child is 17. If the child is not 17 years or younger on December 31, 2021, that child is not eligible for the CTC.

The maximum Child Tax Credit for 2021 is $3,000. There is a $3,600 credit for children under 6 years old.

Does the ARPA impact things?

The American Rescue Plan Act of 2021 (ARPA), also called the COVID-19 Stimulus Package, is stimulating the economic and health recovery from the COVID-19 pandemic. The bill was passed on March 11, 2021, and is worth $1.9 trillion. It builds upon many aspects of the 2020 CARES Act.

What does this mean for you? It means that parents are able to receive monthly checks throughout 2021. These checks act as advanced payments of the Child Tax Credit. The goal is to put money back into Americans’ pockets as soon as possible.

When you complete your 2021 taxes in April 2022, you will have two options:

1. You take 50% and save the rest for later. The U.S. Treasury will send you six monthly payments from July to December 2021. Those six payments will consist of 50% of your CTC. Qualifying for a $3,000 credit means $1,500 will be split into six payments of $250. The remaining $1,500 will be claimed later.
2. You claim 100% now. You can opt out of the monthly payment program through the U.S. Treasury. You will receive your CTC at the regular time of filing.

We can help you. Yoke Tax professionals are always available to get everything done quickly and smoothly. Let us handle the numbers while you rake in the cash.

Frequently Asked Questions

If you have any other questions, Yoke Tax is ready to help you. Set up a free one hour consultation with a tax professional today.

Who counts as a “Qualifying Child?”

A child qualifies for the Child Tax Credit if the child meets these conditions:

• Your descendant (stepchildren and adopted children included) is under 17 years old
• The child didn’t provide for more than half of his or her own support in the tax year
• Lived with you for more than half the tax year
• He or she doesn’t fill a joint return for the tax year
• The child is legally residing within the U.S. (citizen, national, or resident alien)

Changes to your family or income.

If you earned less income in 2020 than in 2019, don't worry. The IRS generally bases eligibility for the credit and advanced payments based on previously filed tax returns. First, the IRS will look for your 2020 tax return. If you have not filed your 2020 tax return, they will check your 2019 return. The IRS will assume that the number of children you have remains the same, and simply adjust the age of the children based on previous information.

New babies born in 2021

These babies will be eligible for the Child Tax Credit in advance thanks to ARPA. The IRS is developing an online portan with which you can inform them of your qualifying children. There, you can choose to receive your CTC in monthly installments.

Do you have to pay taxes on the payments?

Any payments which you receive in advance for the 2021 Child Tax Credit are not taxable. This is because the money is already owed to you by the federal government.

When you file a Form 1040 for your 2021 tax return, you will be able to reconcile the advance payments you received with the CTC that you’re actually entitled to.



For example, if you received $1,500 in monthly payments, you should receive the other $1,500 with that tax return. To make sure that everything is in order, the IRS will send out a notice of all Child Tax Credit payments made to you during 2021. The IRS will mail it out by January 31, 2022.