For tax year 2021 the following changes have been made to the Child Tax Credit:
- The Child Tax Credit has been expanded to apply to qualifying children who have not yet reached age 18 by the end of 2021.
- The initial amount of the Child Tax Credit is increased to $3,600 for each qualifying child who has not yet reached age 6 by the end of 2021 and $3,000 for each qualifying child who has not yet reached age 18 by the end of 2021.
- If you meet certain residency requirements, the Child Tax Credit will be fully refundable even if you received no income.
- See the IRS instructions for Form 8812 for phase-out and calculation information.
Advanced payments of the Child Tax Credit:
- From July 2021 to December 2021, taxpayers may have received an advance payment of the Child Tax Credit equal to 50% of the IRS estimate of the Child Tax Credit.
- The IRS used the tax year 2020 return to estimate the amount of the advances. If a 2020 return wasn't filed the 2019 return was used.
- If you received advance Child Tax Credit payments during 2021 and the credits you figure using Schedule 8812 are less than what you received, you may owe an additional tax. See Reconciling Your Advance Child Tax Credit Payments on Your 2021 Tax Return for details.
The IRS has indicated recipients of the Advanced Child Tax Credit (ACTC) will need to compare the amount of payments received during 2021 with the amount of CTC claimed on their 2021 return. If the amounts don't match what the IRS has on record, this could result in a delay of refund. For more information, including a link to the IRS CTC portal, see IRS Updates and FAQs for 2021 CTC and ACTC Payments.
The following items are required to generate the Child Tax Credit or Additional Child Tax Credit:
- Select Check Return from along the top of the screen.
- Make sure Form 1040, line 6c, column (4) is selected, indicating the dependent is a Qualifying Child.
- If the check isn't present, go to the Dependents screen, and review your entries.
- Within the Worksheets, locate the Child Tax Credit Worksheet (Form 1040, Line 52).
- Review the calculation on the Child Tax Credit Worksheet.
- For tax year 2020 and prior, if there's no taxable income reported, the credit won't be calculated.
- Make sure the Social Security number and Date of Birth have been entered for the taxpayer and spouse, in the Client Information screen.
- Make sure Social Security number and Date of Birth have been entered for the dependent(s) in the Dependents screen.