Where Are Families Most at Risk of Missing Out on the Expanded Child Tax Credit?

Those with the most to gain may be missing out on expanded benefits

The American Rescue Plan Act significantly expanded the child tax credit (CTC) for 2021, but according to the Treasury Department, as many as 2.3 million children might miss out on benefits because their families did not file income taxes in 2019 or 2020. Many of these families earned too little to file a tax return and thus have the most to gain from the expanded CTC. 

This tool maps where children in these families are most likely to live, which can help inform policymakers and community advocates working to connect eligible families to needed benefits.

 

 

 

How the expanded child tax credit works

Under the American Rescue Plan Act, families with children under age 6 are eligible for an annual credit of up to $3,600 per child, and families with children ages 6 to 17 are eligible for an annual credit of up to $3,000 per child. (Prior to the plan, the maximum CTC was $2,000 per child, and many low-income families did not qualify for it.) 

Families can receive up to half of the expanded CTC in monthly installments from July through December and the rest when they file their taxes next spring. Currently, both the expanded credit and monthly payment option are only available for tax year 2021.

Families who have not received monthly payments yet (because they did not file taxes in 2019 and 2020 or because they did not claim an economic impact payment through the IRS’s nonfiler tool) can sign up for the child tax credit through getctc.org.

 

Further Reading

Tax Policy Center Briefing Book: What is the child tax credit?

The Child Tax Credit Grows Up to Lift Millions of Children Out of Poverty

Delivering Tax Benefits to People Who Are Experiencing Homelessness

Keeping the Monthly Child Tax Credit Coming, Limiting Risk of Overpayments

IRS Set to Deliver Advance Monthly Payments: Needs Ability to Update Bank Information

How Increasing the Federal EITC and CTC Could Affect State Taxes

An Expanded Child Tax Credit Would Reduce Poverty to Below 10 Percent in Nearly All States

Expanding the Child Tax Credit Could Lift Millions of Children out of Poverty

Last updatedSeptember 24, 2021