Advance payments of the child tax credit and any refund you receive as a result of applying for the child tax credit will not be counted as income when determining if you or anyone else is eligible for benefits or assistance, or how much you or anyone else can receive, in under any federal or any state or local program funded wholly or in part with federal funds. In addition, the American Rescue Plan extended the entire child tax credit permanently to Puerto Rico and the United States. This also applies to early payments of the child tax credit, which were not exempt from garnishment by non-federal creditors under federal law. This is different from early child tax credit payments, which were not reduced (that is, offset) by overdue child support.
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. Gómez says money doesn't count as income, so families can still apply for the child tax credit without being disqualified from receiving public assistance benefits. Refunds for an overpayment of a tax liability, including the portion to which your child tax credit relates, can be reduced (that is, offset) by past years' back taxes or other federal or state debts that you owe. This is different from early child tax credit payments, which were not reduced (that is, offset) by past years' back taxes or other federal or state debts that you owe.
Most eligible families didn't have to do anything to receive tax credit payments; the IRS sent them to taxpayers because they were eligible under previous income tax returns, according to Gabriela Gomez of the Los Angeles County Department of Public Utilities. In addition, when determining eligibility for benefits or assistance, neither your tax refund nor any of your advance payments of the child tax credit can be counted as a resource for at least 12 months after you receive it. The American Rescue Plan increased the child tax credit and expanded its coverage to better help families who care for children. Last year, the tax credit was also fully refundable, meaning that if the amount of the credit a taxpayer qualified for exceeded the amount of tax they owed, they could recover the difference.
