How does the child tax credit work?

The child tax credit is a fully refundable tax credit for families with eligible children. The credit is fully refundable: low-income families qualify for the maximum credit regardless of how much they earn. If you decide not to receive any more monthly payments, you will receive the remaining child tax credit as a lump sum next year when you file your tax return. If you haven't yet filed your tax return, you still have time to file it and get your full child tax credit.

The CTC was increased and made refundable in 2001 to coordinate with the earned income tax credit (EITC). The expansion of the American Rescue Plan child tax credit will reduce child poverty by (supplementing) the income of families receiving the tax credit and () making the credit available to a significant number of new families. In addition, the American Rescue Plan extended the full child tax credit permanently to Puerto Rico and the United States. The American Rescue Plan increased the child tax credit and expanded its coverage to better help families who care for children.

You can add or change your bank account information through the IRS child tax credit update portal. The American Rescue Child Tax Credit Plan provides the largest child tax credit in history and historic relief to most working families in history. If you received early payments from the child tax credit, you must reconcile (compare) the total you received with the amount you can claim. The child tax credit update portal is no longer available, but you can view the total of your advance payments in your online account.

You can use your child tax credit update portal username and password to log in to your online account. To unsubscribe from monthly payments or unsubscribe, you can visit the IRS child tax credit update portal. The credit will also be available periodically throughout the year starting in July, rather than being a lump sum when paying taxes.

Lucille Guerrido
Lucille Guerrido

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