Millions of Americans stand to benefit from two major relief programs provided by the IRS: the expanded Child Tax Credit (CTC) and the Recovery Rebate Credit (RRC). These programs aim to ease financial burdens, especially for families and individuals recovering from economic challenges.
What is the Child Tax Credit?
The Child Tax Credit offers up to $3,600 per child under age six and $3,000 for children aged six to seventeen. This significant expansion under the American Rescue Plan provided families with advance monthly payments during the second half of 2021.
Who Qualifies?
- Income Limits:
- Single filers earning up to $75,000.
- Heads of households earning up to $112,500.
- Married couples filing jointly earning up to $150,000.
- Child Requirements:
- Children must be under 18 at the end of the tax year.
- Must be a dependent, such as a biological child, stepchild, or foster child.
- The child must have lived with the filer for at least half the year.
The expanded credit was fully refundable, which means families could claim the full amount even without federal income tax liability.
What is the Recovery Rebate Credit?
The RRC allows eligible individuals to claim the third stimulus payment of $1,400 per person, including dependents. If you didn’t receive the full payment during the distribution period, you can still claim it on your tax return.
Who Can Claim the RRC?
- Income Limits:
- Single filers with an AGI of $75,000 or less.
- Heads of households with an AGI of $112,500 or less.
- Married couples filing jointly with an AGI of $150,000 or less.
- Additional Benefits:
- Dependents also qualify for the $1,400 payment.
How to Claim These Benefits?
- File Your Taxes: Even non-filers should file to claim eligible credits.
- Check Your Status: Use the IRS Child Tax Credit Update Portal to track payments and make updates.
- Seek Assistance: Consult with tax professionals or use free resources to ensure you get the full amount you’re eligible for.
Why It Matters
These programs have been life-changing for many families, offering relief during uncertain times. However, understanding eligibility and filing requirements is essential to avoid missing out.
Stay informed, take action, and ensure you claim every dollar available to you. These credits can make a significant difference in managing everyday expenses and planning for the future.