2021 Child Tax Credits

The 2021 child tax credits that the government is sending out as part of the Covid-19 stimulus package is based on your 2020 earnings. If you are expecting higher income in 2021 than you had in 2020, this could cause you to have to repay these funds when you file your taxes. 

For 2021, the stimulus package gives a $3,600 child tax credit for each child under age 6 and $3,000 for each child that is between 6 and 17 years old as of 12/31/2021. Prior to the increased child tax credit for 2021, the credit was $2,000 for each child age 16 and under. Another new feature of the stimulus package is that the government sent half of each family’s total estimated credits in 6 monthly installments beginning 07/15/2021. The expanded 2021 tax credits do have income limits which begin to phase in at $75,000 in income for most single filers and $150,000 for most married couples. So if your family received prepayments from the government starting 07/15/2021 that were based on your 2020 income, and your 2021 income puts you above those income limits, then you’ll likely have to pay the money back to the government when you file your 2021 taxes.