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Expanded Child Tax Credit: Millions Still Eligible But Haven’t Claimed It

A recent report by the Treasury Inspector General for Tax Administration (TIGTA) shows that the IRS sent $93.5 billion in Child Tax Credit payments between July and December 2021. Over $1.1 billion, however, was sent to taxpayers who were not eligible for the payments. There are also 4.1 million eligible taxpayers who never received a payment. Thankfully, there’s still time for those who qualify to request their expanded Child Tax Credit payments.

The Expanded Child Tax Credit – Are You Eligible?

In 2021, the Child Tax Credit (CTC) was temporarily expanded under the American Rescue Plan Act. It increased the credit amount from $2,000 per child to $3,000 (ages 6-17) or $3,600 (children 5 or younger) per child.

Who Qualifies As a Dependent

You may be eligible for the CTC if you have a qualifying child with a valid Social Security number (SSN) and meet the income requirements (see Income Thresholds below). To be a qualifying child for the 2021 tax year, dependents generally must:

  • Be younger than 18 at the end of the year
  • Be your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of one of these (for example, a grandchild, niece, or nephew)
  • Provide no more than half of their own financial support during the year
  • Live with you for more than half the year
  • Be claimed as your dependent on your tax return
  • Be a U.S. citizen, U.S. national, or U.S. resident alien

Dependents who file a joint return with their spouse for the tax year do not qualify under the CTC. Neither do those who file a tax return only to claim a refund of withheld income tax or estimated tax paid.

Income Thresholds

You may qualify for the full amount of the 2021 Child Tax Credit for each qualifying child if you meet all eligibility factors and your annual income is not more than:

  • $150,000 (married and filing a joint return, or qualifying widow or widower)
  • $112,500 (head of household)
  • $75,000 ( single or married filing a separate return)

Parents and guardians with higher incomes may be eligible to claim a partial credit. You can also use the IRS interactive tax assistant to check your eligibility.

How To Claim The Expanded Child Tax Credit

If you’re one of the 4 million taxpayers who hasn’t received the expanded Child Tax Credit and are eligible to receive it, you still have time to claim the CTC.

Those who aren’t required to file a 2021 tax return should claim the expanded Child Tax Credit by doing one of two things:

  • Submit a form on GetCTC.org by November 15, 2022. This free option is for taxpayers with lower incomes who aren’t required to file a return. It takes approximately 15 minutes to complete the process, but it’s a quick way to claim the CTC and missing stimulus payments.
  • Get free tax preparation help. If you miss the November 15 deadline for the online form, you can still file by paper to receive any tax credits or stimulus payments you are eligible to receive. Free services are available through the Volunteer Income Tax Assistance (VITA) Program. You have up to three years to claim the credit, if eligible.

It’s important to note that those who received the advance payments still need to file their 2021 tax returns if they want to receive any remaining CTC amount. If you are required to file but haven’t done so yet, submit your forms as soon as possible. You may face penalties and interest fees if you owe taxes. For help with your unfiled taxes, you can also call Tax Defense Network at 855-476-6920 for a free consultation.