Child Tax Credit for 2021
See Important Updates on the Advance Child Tax Credit Payment for Tax Year 2021.
The Child Tax Credit is intended to help offset the tremendous costs of raising a child or children. It is a now a fully refundable tax credit and you can qualify even if you had no earned income. For Tax Year 2021, the credit can be worth up to $3,600 per child (in 2017 and earlier tax years, the credit amount was $1,000). In most cases, a tax credit is better than a tax deduction. A credit directly reduces your tax bill dollar-for-dollar, but a deduction only reduces your taxable income.
Our CHILDucator tax educator tool will help you find out if your child or dependent qualifies you to claim the Child Tax Credit on your tax return. Just answer the "Yes" and "No" questions until the CHILDucator provides you with an answer! The best way to determine whether or not you qualify for the credit is to start and eFile a tax return on eFile.com. The eFile app will select the correct forms for you to complete based on your answers to several tax questions, and it will calculate your Child Tax Credit amount.
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Additional Child Tax Credit
If you are claiming the enhanced version of the Child Tax Credit as part of the American Rescue Plan Act - meaning your income qualifies you for it - then the information below may not apply to you. However, it may be used for those who do not qualify for the ARP rules.
If your taxes owed are reduced to $0 and you still have some Child Tax Credit left over, you may be able to receive some or all of it as a tax refund by claiming the Additional Child Tax Credit. We know that figuring this out can be confusing for taxpayers, but do not worry. The eFile app will calculate this amount for you automatically. Just enter your tax data and let eFile.com do the hard work for you. Start a free eFile.com account.
Be aware that the maximum refundable portion of the credit is $1,400 (equal to 15% of earned income above $2,500). Therefore, if your tax is $0 and your total earned income is at least $2,500, you can claim the refundable part of the credit. Generally, the Child Tax Credit is a nonrefundable credit; however, certain taxpayers may be entitled to a refundable Additional CTC if the following requirements apply:
• Taxpayers with more than $2,500 of taxable earned income if they have at least one qualifying child.
• Taxpayers with three or more children may also be eligible, regardless of their income.
• Limited to $1,400 per qualifying child.
Additional Child Tax Credit Schedule 8812 is generated via the eFile Tax App. Additional information and rules relating to an adopted child, foster child, or qualifying child of more than one person are also applied. If your Additional CTC was previously disallowed, you might need to complete Form 8862 and eFileIT. On your eFile account, you will be able to add this form when entering your dependent information.
Note: The newly enhanced Child Tax Credit, the Additional CTC, and the Credit for Other Dependents are all completed on Schedule 8812 which has been modified for 2021 Returns. The eFile Tax App will complete this form for you based on your dependent information and eFileIT.
For 2022, the Additional CTC will be worth up to $1,500.
Child Tax Credit Qualifications
You can claim the Child Tax Credit if your income is not too high (see the income limitations for the Child Tax Credit) and if you have a child or children who qualify. Use the CHILDucator Tool above to find out if your child qualifies you to claim the credit. Our CHILDucator is a multi-year tool so you can use it for previous years' tax returns as well! See all of the requirements for the Child Tax Credit.
Dependents who can’t be claimed for the Child Tax Credit may still qualify you for the Credit for Other Dependents. This is a non-refundable tax credit of up to $500 per qualifying person. The qualifying dependent must be a U.S. citizen, U.S. national, or U.S. resident alien. You can use our DEPENDucator tool to see if your dependent qualifies for this credit.
Once you have determined if you can claim the Child Tax Credit, use the FREE Tax Calculator, or "TaxStimator", to calculate and estimate your tax refund (or taxes owed) for the current tax year. Then, start a free eFile.com account and start preparing your tax return - it's that easy!
How to Claim the Child Tax Credit
It's easy to claim the Child Tax Credit (and the Additional Child Tax Credit) when you prepare and e-File your tax return on eFile.com. We will automatically determine if you qualify for the credit based on the information you enter. If you qualify to claim the credit, we will then calculate the amount of your credit and will fill out the correct forms for you to get your maximum credit.
Detailed overview of the Taxes Children and Dependents
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