Claim Your Child Tax Credit: Still Time for 2021 Payments

It's an important windfall that nobody should be giving up.

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Key points

• Some people may not have received Child Tax Credit payments for 2021.
• It's still possible to claim that money, but doing so requires a tax return.

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Last year, the Child Tax Credit got some important enhancements. For one thing, its value increased from a maximum of $2,000 in 2020 to a maximum of $3,000 in 2021 for children aged 6 to 17, and a maximum of $3,600 for children under age 6.

Half of the credit was also paid in monthly installments from July through December, and the credit changed to become fully refundable. This means that even if a family has no tax obligation, it can still receive the credit in full.

While many families saw Child Tax Credit funds hit their bank accounts last year and are gearing up to claim the remainder of that credit on their 2021 tax returns, some eligible households may not have received any money yet. The IRS based its installment payments on data it had on record from 2019 and 2020 tax returns. Those who didn't file taxes those years, and who also didn't register for the Child Tax Credit, may not have gotten a dime.

Now, those people have a chance to claim the full credit by filing a tax return for 2021. And the Biden Administration is intent on making sure those recipients go after the money they're entitled to.

Knowledge is power

Each year, Americans routinely miss out on tax credits by virtue of not filing tax returns. The Earned Income Tax Credit, for example, which is a credit designed to help lower-income households, frequently goes unclaimed even though it's fully refundable.

The Biden Administration doesn't want eligible recipients to miss out on the boosted Child Tax Credit. It's launching an outreach campaign to encourage families who don't normally file a tax return to submit one this year.

Lower earners -- those whose income is below the standard deduction -- aren't actually required to file taxes, so many don’t. But at this point, the only way to get money from the 2021 Child Tax Credit is to file a return and claim it.

Options for tax filers who need help

Filing a tax return can seem like a daunting prospect for those who are new to the process. But there's help out there for those in need.

First, anyone with an adjusted gross income of $73,000 or less is eligible to file a tax return for free. Some households who have never filed a tax return before can also seek help though VITA, the Volunteer Income Tax Assistance program.

VITA is available to people who:

• Make $58,000 or less
• Have disabilities
• Have difficulty with English

VITA services are completely free, and volunteers go through extensive training so they're equipped to help those who seek out their assistance.

Don't pass up money you're entitled to

These days, inflation is making everyday living costs more expensive. If you didn't receive any money from the Child Tax Credit but think you're entitled to it, it pays to submit a tax return and claim your credit. You may, in the course of doing so, also find you're eligible for additional funds, such as money from the Earned Income Tax Credit. That's money you shouldn't give up.