Tax season is right around the corner, and with the pandemic, deadlines have been extended. On July 15, annual taxes are due, but one difference that might affect your returns is the child tax credit. So what has changed? Here’s what you need to know when filing your taxes.
Due to the pandemic, the federal government has been aiding the American population in multiple ways, like mortgage forbearance and providing stimulus checks. However, those with larger families have taken the biggest hit during the pandemic, which is why the federal government enhanced the child tax credit in March 2020. Qualifying for the credit is based on how many children you have, their ages, and your income. If you qualify, you could be eligible for a maximum benefit of $3,600 if you have children under the age of 5. For children between the ages of 6 to 17, you could receive $3,000, and for children 18 to 24, you could receive a one-time $500 payment. You can opt to receive this credit monthly or annually.
CNET has created an easy calculator that will help you estimate if you benefit from the recent changes to the child tax credit. To find out your benefit, use this calculator to choose your filing status, like single, married, or head of household, and then input your adjusted gross income (AGI), and the number of children in your household by December 31, 2021.
The IRS is expected to release its website about the child tax credit on July 1—which will include two portals where you can update the agency about any changes in income and children, or opt for monthly or annual payments. In the meantime, you can use CNET’s calculator to see what you might potentially qualify for in your taxes. But for a more precise answer, make sure to consult a tax or financial consultant.
To learn more about how to prepare for your taxes this year, make sure to check out the steps we suggest you take before filing.