The Child Tax Credit expanded temporarily, then returned to its previous form
Congress passed an expanded Child Tax Credit as part of the American Rescue Plan in March 2021. That expansion increased the credit from $2,000 per child to $3,600 for children under 6 and $3,000 for children ages 6 to 17. The expansion also made the credit partially refundable, meaning families could receive money back even if they owed no taxes. However, this expansion was temporary — it applied only to the 2021 tax year.
For the 2022 tax year and beyond, the Child Tax Credit returned to $2,000 per child, the amount that had been in place since 2017. Congress did not pass legislation to extend the expanded credit beyond 2021, so the higher amounts and the refundable portion ended after that year.
Key Takeaways
- The American Rescue Plan temporarily increased the Child Tax Credit to $3,600 for children under 6 and $3,000 for children ages 6 to 17 for the 2021 tax year only.
- The 2021 expansion made the credit partially refundable, allowing families to receive refunds even if they had no tax liability.
- The credit reverted to $2,000 per child for 2022 and later tax years because Congress did not extend the temporary increase.
- Families who received advance payments of the expanded credit in 2021 had to reconcile those payments when filing their 2021 tax return.
How the 2021 expansion worked
Under the American Rescue Plan, the IRS sent advance payments of the expanded credit to families who had filed a 2020 tax return or provided information to the IRS through a non-filer tool. These payments began in July 2021 and continued monthly through December 2021. Families received half of their total credit amount in advance payments, with the remaining half claimed on their 2021 tax return.
The advance payments were based on the IRS's records of the family's income and number of children. Some families received payments that did not match their actual 2021 income or household composition. When filing their 2021 return, families had to report the advance payments they received and reconcile them against the credit they were actually may have access to to. This meant some families owed money back if they received more in advance than they may have access to for, while others received additional credit when they filed.
Why the expansion ended after 2021
The expanded Child Tax Credit was included in the American Rescue Plan as a temporary measure to provide relief during the pandemic. The legislation set an expiration date of December 31, 2021, meaning the higher credit amounts and refundable portion applied only to that tax year. Congress would have needed to pass new legislation to extend the expansion beyond 2021, but no such legislation was enacted.
There have been proposals in Congress to restore or extend the expanded credit, but as of now, no permanent extension has passed. The credit remains at $2,000 per child for tax years 2022 and later, the same amount established by the Tax Cuts and Jobs Act of 2017.
The difference between 2021 and current credit amounts
| Feature | 2021 (Expanded) | 2022 and Later |
|---|---|---|
| Credit per child under 6 | $3,600 | $2,000 |
| Credit per child ages 6–17 | $3,000 | $2,000 |
| Refundable portion | Up to $1,600 per child under 6; up to $1,500 per child ages 6–17 | Up to $1,600 per child (all ages) |
| Advance payments | Yes, monthly from July–December 2021 | No |
How to claim the current Child Tax Credit
To claim the Child Tax Credit for 2024 or later tax years, you report it on your tax return using Form 1040 and Schedule 8812. You must have a valid Social Security number for each child you claim, and the child must be your dependent. The credit begins to phase out at higher income levels — the exact threshold depends on your filing status.
If you are filing your own return, you will enter information about each may have access to child and calculate the credit amount based on your income. If you use tax preparation software or work with a tax professional, they will walk you through the questions needed to determine whether you may have access to and how much credit you can claim.
What changed for families who received advance payments
Families who received monthly advance payments in 2021 had to account for those payments on their 2021 tax return. The IRS sent each family a letter showing the total amount of advance payments they received. When filing the 2021 return, families reported this amount and compared it to the credit they actually may have access to for based on their 2021 income and household.
If a family received more in advance payments than they were may have access to to, they had to repay the difference when they filed their return — this reduced their refund or increased the amount they owed. If they received less than they may have access to for, they claimed the remaining credit on their return and received it as part of their refund or reduced tax liability. The IRS provided worksheets and instructions to help families reconcile these payments.
Frequently Asked Questions
Can I still claim the Child Tax Credit on my 2024 return?
Yes. The Child Tax Credit of $2,000 per child is still available for 2024 and later tax years. You claim it on your tax return if you have a may have access to child and meet the income requirements. The credit is not as large as it was in 2021, but it remains part of the tax code.
Do I have to pay back the advance payments I received in 2021?
Only if you received more in advance payments than you were may have access to to based on your 2021 income and household. When you filed your 2021 return, you reconciled the advance payments against your actual credit. If you owed money back, it reduced your refund or increased your tax liability. If you may have access to for more credit than you received in advance, you got the difference on your return.
Will Congress extend the expanded Child Tax Credit again?
There is no current legislation extending the expanded credit. Congress would need to pass new legislation to restore the higher amounts or the enhanced refundable portion. Proposals have been introduced, but none have become law. You can monitor Congress's activity through Congress.gov if you want to track any future proposals.
What income limits explore to the Child Tax Credit now?
The credit begins to phase out at $400,000 for married couples filing jointly and $200,000 for single filers and heads of household. The phase-out amount has been adjusted for inflation in recent years, so the exact threshold may vary slightly by tax year. Check the IRS website or your tax software for the current year's threshold.
If I did not receive advance payments in 2021, can I still claim the credit on my return?
Yes. Some families did not receive advance payments because the IRS did not have their information or they did not meet the requirements for advance payments. You can still claim the full Child Tax Credit on your 2021 tax return if you meet the income and dependent requirements. The credit is not reduced because you did not receive advance payments.