3. Child Tax Credit
The Child Tax Credit pays you money for each child you have up to age 17. The children must be U.S. citizens. You are eligible for the credit even if you don’t owe taxes. The amount that families claiming the Child Tax Credit receive increased from $2,000 to $3,600 for each child under 6 and $3,000 for each child age 6-17. This increase is only for the year 2021. For tax year 2022 (when you file in 2023) it will go back to just $2,000. The payment decreases once the family income is beyond $112,500 per year (single parent) or $150,000 per year (married couple.)
No application is needed to use this program. However, you must file your taxes using the guidelines posted on the Schedule 8812 (Form 1040 or 1040A, Child tax Credit page.
You may also qualify for a $500 credit available to any dependent who is not eligible for the usual $3,000 or $3,600. These can be children age 18 and children ages 19–24 who were in school full time in at least five months of the year. Older dependents as well as some children who are not US citizens qualify for the $500 credit, referred to as the “other dependent” credit on tax forms.
Many people got advance child tax credit payments of $300 per month during 2021 due to the pandemic. If you did not receive Advanced Child Tax Credit payments and you are eligible, you will be able to claim the full amount of the 2021 Child Tax Credit when you file your 2021 taxes. If you did get those payments they should have sent you a Advance Child Tax Credit (IRS Letter 6419) which you will need when you file your tax return.