Expanded Child Tax Credit on the Way: What You Need to Know

Introduction

As a leading provider of life design consulting and coaching services, Life Designers is dedicated to helping individuals and families navigate through various financial aspects of their lives. In this article, we will explore the expanded child tax credit and what you need to know about the program's benefits and eligibility requirements.

Understanding the Child Tax Credit

The child tax credit is a tax benefit designed to provide financial support to families with dependent children. In the past, eligible families could claim up to $2,000 per child under the previous tax credit system. However, recent changes in legislation have expanded the child tax credit, increasing the maximum amount and making it more accessible to families.

Key Changes in the Expanded Child Tax Credit

The expanded child tax credit brings several important changes that can significantly impact eligible families:

1. Increased Maximum Credit Amount

Under the expanded program, the maximum credit amount has increased to $3,000 per qualifying child aged 6 to 17 and $3,600 for children under the age of 6. This is a notable increase from the previous $2,000 credit.

2. Age Eligibility

The expanded child tax credit extends eligibility to include 17-year-old dependents, compared to the previous cutoff age of 16. This change allows families with older children to continue benefiting from the tax credit.

3. Monthly Payments

One of the most significant changes is the introduction of monthly payments. The IRS will advance a portion of the credit to eligible families starting in July 2021. This change aims to provide immediate financial support to families who may rely on the credit to cover essential expenses.

4. Phased-Out Income Limits

The expanded child tax credit also adjusts the income limits for eligibility. The credit phases out gradually for individuals earning over $75,000 per year and couples earning over $150,000 per year, ensuring that the benefits reach the families who need them the most.

Who Qualifies for the Expanded Child Tax Credit?

The expanded child tax credit is available to many families, but it is essential to understand the eligibility requirements:

• Children must be under the age of 18 and meet specific relationship and residency criteria.
• Families must have a valid Social Security number or an Individual Taxpayer Identification Number (ITIN).
• Families should have earned income or certain tax benefits to qualify for the monthly payments.

It is crucial to consult with a qualified tax professional or utilize the specialized consulting and coaching services offered by Life Designers to determine if you are eligible for the expanded child tax credit.

How Life Designers Can Help You Maximize the Benefits

At Life Designers, our team of experienced consultants and coaches understands the complexities of the expanded child tax credit and can guide you through the process of maximizing its benefits. We offer personalized and tailored services to help families navigate through the eligibility requirements, calculate potential credits, and stay informed about any updates or changes in tax laws.

Our comprehensive consulting and coaching services in the field of business and consumer services - consulting & analytical services, coupled with our expertise in tax planning, ensure that you can make informed decisions with regards to your family's financial future.

Conclusion

The expanded child tax credit brings significant opportunities for eligible families to receive financial support. Life Designers is here to assist you in understanding the program, determining eligibility, and maximizing your benefits. Contact us today to learn more about our consulting and coaching services and take control of your financial future.