Child Tax Credit

The expanded Child Tax Credit (CTC) can help lift Latino children out of poverty.

Remember to file your taxes for 2021 this year to receive these benefits.

WATCH: Brenda's CTC Story

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What is the CTC?

This expanded and improved CTC is part of the American Rescue Plan Act (ARPA) and aims to help families raising children make ends meet. The CTC provides eligible families $3,000 a year for each child between six and 17, and $3,600 per year for each child ages five and under.

Who is eligible?

Under the ARPA, almost every family can receive money from the CTC. This includes families:

  • Who haven’t filed a tax return in recent years.
  • With very low or without recent income.
  • With a child with a Social Security number (SSN), even if the filer doesn’t have an SSN.
  • Families that are residents of Puerto Rico.
  • Married couples making less than $150,000, single filers making $75,000, and heads of households making $112,500 a year can receive the full payment. Families with incomes under $200,000 for single files and $400,000 can still receive up to 2,000 per eligible children.

 

What is an eligible dependent?

For the most part, an eligible dependent is a child that lives with you. Other eligibility requirements are:

  • Relationship. The child must be your child, grandchild, stepchild, adopted child, younger sibling, stepsibling, half-sibling, or their descendent; or a foster child placed with you by a government agency.
  • Taxpayer ID number. Children claimed for the CTC must have a valid SSN. Unfortunately, children with Individual Taxpayer Identification Numbers (ITIN) are not currently eligible to be claimed as dependent for families seeking to apply for this credit.
  • Age. The child must be 17 or under on December 31, 2021.
  • Support. The child does not provide more than half of their own support in 2021.
  • Residency. The child must live with you in the United States for more than half the year. Time living together doesn’t have to be consecutive. Except for non-custodial parents that have presented a signed waiver form from the custodial patent
  • Dependency. The child must be considered a dependent for tax filing purposes. Currently a child cannot be claimed by themselves.

What if I received advance CTC payments?

Many families received the advance monthly CTC over the second half of 2021. This advance credit counts towards your total credit for 2021. Families that received this advance credit should have gotten a 6419 letter from the IRS saying how much they received from the advance CTC. Also, if you received an Economic Impact Payment, you should have also received the 6475 letter from the IRS as well. Families should keep these letters at hand because it will have important information for filing their tax return this year.

How to claim the CTC?

To claim the Child Tax Credit, you must complete a 2021 tax return. If you received advance CTC payments last year, you could still receive the other half of the credit when filing this year. If you did not receive advance payments, you can still receive the full CTC benefit when filling year.

There are several free ways to file taxes online or to receive in-person support from community partners when filing a return. Some options for tax assistance include: · IRS Free File (available to people whose income was $72,000 or less in 2021) · IRS’s Volunteer Income Tax Assistance (VITA) (generally available to people who make $57,000 or less, those who have disabilities, and those who speak limited English) · MyFreeTaxes · GetYourRefund · For free legal help on tax issues with the IRS (including owing back taxes), find your local Low Income Taxpayer Clinic (LITC)

What if I don’t have an SSN?

If you don’t have an SSN and need to file taxes, you can apply for an ITIN. Even if you require an ITIN, you may be eligible for the CTC and certain tax benefits. An ITIN is a nine-digit number issued by the IRS for federal tax purposes exclusively to nonresidents and resident aliens, their spouses and dependents unqualified to get an SSN. To apply for an ITIN, you must submit a completed W-7 form with your federal tax return. Some Volunteer Income Tax Assistance (VITA) program may be able to help you file your taxes but not your W-7.

In order to complete your ITIN application, you must submit original identification documents like passports or other forms of ID. Please note that this might be troublesome since it might take time to get your document reviewed and mailed back to you. Another option is to provide a certified copy of your original documents, for this you must go to a Certified Acceptance Agent (CAA). The information of your original documents should match that on Form W-7. For more information on filing your ITIN application please visit this link.

Where can I find a VITA Site or a CAA?

You can make an appointment at a Taxpayer Assistance Center (TAC) run by the IRS. You can find information about a TAC near you by following this linkà https://www.irs.gov/help/tac-locations-where-in-person-document-verification-is-provided To find a VITA site near you please use this VITA locator tool: Get Free Tax Prep Help (treasury.gov)

To find a CAA near you please use this CAA locator tool: Acceptance Agent Program | Internal Revenue Service (irs.gov)

Claim Your Child Tax Credit

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Sergio Benicio Escobar Oaxaca's story

Father of four, ages 11, eight, five, and two months old 

From California 

“During the hardest times of the pandemic, sometimes I didn’t have the means to pay rent: I had to borrow money […]. That’s how I survived.” With the CTC, “I’ve been able to pay back the consequences of the pandemic […]. So the CTC has helped me a lot.” 

Carol Ríos's story

Single mother of two, a 16 and an eight-year-old 

From Minnesota 

“The CTC is something that truly helps: it’s very necessary money,” she says. “When you receive that money is like a release, a break. […] It is something that is as beneficial for the children as much as for the parents.” 

For Community-Based Organizations

The temporary expansion of the CTC is an opportunity to change the economic trajectory of Latino families. Unfortunately, systemic barriers impede access of this credit for many families, and they may be at risk of leaving thousands of dollars unclaimed. Whether you provide tax prep services or support your community in another way, all of us can support families to access this credit.

Data show that Latino families are lagging other groups when trying to access this credit. An October survey found that Hispanic parents were less likely to claim the CTC on their tax return (64% of tax filers) compared to white and Black parents (76% among tax filers). Hispanic respondents were also less likely to report receiving the monthly CTC payments (61%) compared with white respondents (67%).

 

What can your organization do?

From providing information about tax credits to families that your organization interacts with to leveraging your social media platforms to promote tax credits, there are plenty of actions that your organization can take to help us spread the word.

Stay Informed! – Get updated through official channels like the ChildTaxCredit.gov or attend one of UnidosUS’s upcoming navigator trainings or town halls.

 

Share information on social media.

Frequently Asked Questions

Who is eligible to claim the Child Tax Credit?

+ All eligible families—single filers making up to $75,000, joint filers (married couples) making under $150,000 or head of household making $112,500—can receive the CTC in 2022.

+ Families can sign up for the CTC even if they have little to no income or receive other federal benefits.

+ A ‘qualifying child’ is an individual who was born on or after January 1, 2004, and is a son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of the claimant (for example, a grandchild, niece, or nephew).

+ Your ‘main home’ can be any location where you regularly live—may be your house, apartment, mobile home, shelter, temporary lodging, or other location. It doesn’t need to be the same physical location throughout the taxable year. You don’t need a permanent address to get these payments. If you are temporarily away from your main home because of illness, education, business, vacation, or military service, you are generally treated as living in your main home.

Non-filers may be:

  1. Low income – individuals with annual incomes less than $12,400 filing single or $24,800 filing jointly, who are not required to file taxes.
  2. SNAP, TANF, WIC, Medicaid recipients
  3. Racial and ethnic minorities
  4. Non-English speakers
  5. Incarcerated
  6. Living in rural communities
  7. Experiencing homelessness
  8. Immigrants or living in mixed immigration status families
  9. Still not sure about CTC eligibility? Use the CTC Eligibility Assistant 
Where can I go to get help signing up for the Child Tax Credit?
Is there a minimum income requirement for the Child Tax Credit?

+ No. There is no minimum income required to get the CTC for tax year 2021. Even if you have $0 in income, you can still the CTC. In the past, families needed to have earned income, but this year that is not the case.

What should I do if I owe money to the IRS?

+ Families should file even if they owe money. CTC payments will not be reduced (offset) for overdue taxes from previous years or other federal or state debts that you owe. While the rest of your refund may be reduced in 2022, it helps pay down your debt so that you can get the full credit in future years. Also, refunds from the child tax credit will not be garnished for student loan debt.

Is the Child Tax Credit a loan?

+ No. Families don’t have to pay it back. There are also protections in place to ensure that you won’t have to pay this money back even if there was a mistake or a change in your circumstances providing that your 2021 income is less than $40,000 ($60,000 for married couples or $50,000 for heads of households).

Do I need to report the Child Tax Credit money as income?

+ No. Advance CTC payments and other economic impact payments are not taxable or considered income and will not be reported as income on your 2021 tax return.

Will I lose benefits if I receive the CTC?

+ No. The CTC does not impact your eligibility for other federally funded benefit programs, such as SNAP, Medicaid, SSI, TANF, public housing, or other public benefits. Tax credits are not considered earned income.

Will receiving the CTC affect my immigration status?

+ No. Documented immigrants with green cards are eligible as well as citizen children of undocumented parents are eligible. Receiving the CTC or other federal tax credits that you are eligible for will not affect your immigration status, your ability to get a green card, or your future eligibility for immigration benefits. The CTC, or other tax credits, are not considered in the evaluation of the public charge rule.

If I have an ITIN, would I qualify for the benefit?

+ Yes, taxpayers who are parents or primary caretakers of a qualifying child will need an ITIN or an SSN to claim the child as a dependent. ITINs are issued by the IRS for individuals who do not qualify to have an SSN. ITINs are used only for tax filing purposes and to not authorize an individual to work or claim other benefits.

Would the IRS contact me via email, text, or social media to request personal information?

+ No. The federal government doesn’t initiate contact with individuals by email, text messages, or social media channels to request personal or financial information—even information related to advance CTC payments or other type of payments.

If I can’t go to a VITA site and need a private preparer, how can I choose the right tax preparing service for me?

It is important to make sure that your private tax preparer has the correct qualifications. A general rule is to find a tax preparer that has a clear track record of servicing clients successfully. Also, make sure that the tax preparer is charging a fee that is commensurate with his service. A general rule of thumb is to avoid preparers who base fees on a percentage of the refund or who boast bigger refunds than their competition. Learn more in this website: Tips to help people choose a reputable tax preparer | Internal Revenue Service (irs.gov)

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