Business

/

ArcaMax

Child Tax Credit monthly payments to begin rolling out July 15

Susan Tompor, Detroit Free Press on

Published in Business News

The Child Tax Credit itself is complicated and has many rules.

If divorced, for example, only one parent can claim the credit for a child. The child must live with you for at least six months out of the year.

Under the old rules, the Child Tax Credit offered up to $2,000 for each child age 16 and younger but refunds were limited to $1,400 per child.

The Child Tax Credit for 2021 will be fully refundable, while the Child Tax Credit for 2020 was only partially refundable, said Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting.

Not every family will qualify for the larger Child Tax Credit or perhaps any credit at all.

The phaseout range for the Child Tax Credit for 2020 starts at modified adjusted gross income of $400,000 for married filing jointly and $200,000 for other filers.

 

"This remains the phase out range for the Child Tax Credit for 2021 for the basic $2,000 credit," Luscombe said.

But for 2021, there could be an extra amount of money on top of the $2,000 for many families who have more modest incomes.

If you'd qualify, you'd get up to an additional $1,000 for children ages 6 through 17 and an additional $1,600 for children up through age 5.

You'd qualify for the entire amount of the larger credit if you are single and your income is less than $75,000. Or, if you are single and file taxes as a head of household, your income must be under $112,500 to qualify for the full benefit.

If married and filing a joint return, you'd qualify for the full benefit if your combined income is under $150,000.

©2021 www.freep.com. Visit at freep.com. Distributed by Tribune Content Agency, LLC.