The Child Tax Credit (CTC) is a tax credit created in 1997 to help working families offset the cost of raising children. The American Rescue Plan Act, passed by Congress and signed by President Biden earlier this year, increased the amount of the CTC for 2021 to $3,600 per qualifying child under the age of 6 and $3,000 per qualifying child under the age of 18. The American Rescue Plan Act also authorized the IRS to send eligible families periodic advanced payments of their CTC.
From July through December 2021, eligible families should expect to receive advance payments totaling up to one-half of the full CTC amount they qualify for this year. Families will receive the remainder of their CTC when they file their 2021 tax returns.