The American Rescue Plan brought sweeping changes to the Child Tax Credit (CTC), delivering historic financial support to millions of working families nationwide. For the first time, most eligible families automatically began receiving monthly payments starting in July 2021 without needing to take any action.
What Changed with the Child Tax Credit?
The 2021 expansion increased the credit amount and extended eligibility to more families:
$3,600 per child under age 6
$3,000 per child between 6 and 17
The age limit was raised from 16 to 17
Full credit is available for households earning up to:
$150,000 for married couples
$112,500 for single-parent families (Head of Household)
This represents the largest Child Tax Credit in U.S. history, providing significant relief for nearly all working families.
Monthly Payments: A New Approach
Traditionally, families claimed the CTC when filing their tax returns. In 2021, the process was changed to advance monthly payments, offering quicker access to funds:
$300/month for children under 6
$250/month for children aged 6–17
Payments were distributed automatically each month, mainly via direct deposit on the 15th
Families who filed 2019 or 2020 tax returns or registered for stimulus payments were automatically enrolled.
No Tax Return? No Problem
To ensure the credit reached low-income families, the administration partnered with Code for America to develop a simple online sign-up tool. Those who didn’t earn enough to file taxes could register and receive payments.
While the deadline to sign up for monthly payments was November 15, 2021, families can still claim the full credit – up to $3,600 per child – by filing their 2021 tax return.
What’s Next for the Child Tax Credit?
The enhanced CTC was a temporary measure for 2021. However, President Biden’s Build Back Better agenda aims to make this support permanent, extending the benefits to future years and continuing the effort to cut child poverty.
Mary Watson
