Under the American Rescue Plan Act (ARPA) of 2021, the child tax credit (CTC) was expanded to a fully refundable $3,000 per eligible child under 18 ($3,600 per child under 6). In addition, ARPA provides parents with advance child tax credit payments totaling 50% of the estimated amount of their 2021 child tax credit.
For families who meet the income threshold and qualify otherwise, the increased, fully refundable 2021 CTC will provide an immediate benefit that is expected to reduce child poverty in the U.S. by 45%, according to the Center for Poverty and Social Policy at Columbia University.3 The question is: How do families go about obtaining and managing this tax credit including these advance payments?
