Posted December 16, 202110:34 am
The American Rescue Plan Act of 2021 (ARPA) should lift millions of Americans from poverty. The Advanced Child Tax Credit and Earned Income Tax Credit are two sections of the ARPA that will provide families with money. This year, the Child Tax Credit is available regardless of income. Families with little or no income now qualify.
Eligible families will receive half of the tax credit in monthly payments from July to December 2021. The rest of their credit will be deposited after 2021 taxes are filed. This year, the amount paid per child is higher. For children 5 and under, payments will total $3,600 per child. For children ages 6 through 17, payments will total $3,000.
Payments will be sent automatically to those who filed 2020 or 2019 tax returns. For people who did not have to file, the IRS website offers a simple option to file a tax return to get the tax credit: https://www.irs.gov/credits-deductions/child-tax-credit-non-filer-sign-up-tool.
The IRS also has a tool on their website to check eligibility for the child tax credit. See: https://www.irs.gov/credits-deductions/advance-child-tax-credit-eligibility-assistant.
The Child Tax Credit Update Portal is another tool from the IRS. It allows people to update their bank account information, opt out of the credit, and check their enrollment status. See: https://www.irs.gov/credits-deductions/child-tax-credit-update-portal.
The Earned Income Tax Credit (EITC) will be available to more workers who don’t have children. Workers can claim and receive the EITC at the age of 19 starting this year. Foster youth can receive it starting at the age of 18. The amount that can be claimed tripled from $538 to $1,502. Married households without children filing jointly can claim the EITC if they have a maximum total income of $27, 380. Households could use their 2019 income for the EITC if they earned more in 2019 than 2020. To see if you qualify, the IRS has a eligibility tool on their website: https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant.
Written by Cristina Jamba and Erykah Gandy
This article was published in Legal Aid's newsletter, "The Alert" Volume 37, Issue 1, in Fall 2021. See full issue at this link: “The Alert” – Volume 37, Issue 1 – Legal Aid Society of Cleveland (lasclev.org).