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Child Tax Credit Refund: A Complete Guide

The federal government introduced the child tax credit, a fully refundable tax credit, to aid in stabilizing the finances of families with qualified dependents. The child tax credit was increased under American Rescue Plan for 2021 to assist more families.

The child tax credit refund for children under six rose from $2000 to $3000 in 2021. Similarly, it has been raised from $2000 to $3000 for children between the ages of 6 and 16. A few changes were introduced to the Child Tax Credit in 2022, making children up to 17 eligible for it instead of those under 16.

The IRS made advance payments for the child tax credit between July and December 2021, totaling 50% of the child tax credit the IRS predicted you might legitimately claim on your 2021 tax return during the 2022 tax filing period.

You will get the full amount of your 2021 Child Tax Credit Refund by filing a tax return.

Why File For A Tax Return?

You will be issued the 2021 Child Tax Credit amount when you file your 2021 tax return.

Your eligibility for the remaining Child Tax Credit when submitting your tax return this year will be reduced by any monthly Child Tax Credit payments you made last year.

Can I get Child Tax Credit Refund if I haven’t filed tax returns?

You are still qualified to claim any Child tax credit refund even if you don’t often file tax returns. You most likely did not get monthly advance child tax credit payments from the IRS in 2021 if you did not submit tax returns for 2019 or 2020. This happened because the government was unaware of how many dependents you had who qualified and how much each one was entitled to.

Filing Your Taxes

Even though you got fewer monthly payments last year than you may have been entitled to, you will still get the entire Child Tax Credit amount when you file your taxes.

Any child tax credit benefits that are still outstanding will be credited in full to any tax debt you may have in 2021, and any residual funds will be paid to you as a refund.

Your ability to claim the full amount of the Child Tax Credit benefit when filing your taxes will be reduced by any monthly payments you made last year.

Why You Haven’t Gotten Your Full Child Tax Credit

To receive the full amount of the child tax credit to which you are entitled, you must file your 2021 tax return.

By filing a tax return, you can inform the government about your family and the number of eligible children you are claiming.

The IRS calculated your eligibility for monthly Child Tax Credit payments in 2021 using the data from your 2019 or 2020 tax return and sent payments equal to half of the Child Tax Credit that the IRS predicted you would be able to legitimately claim on your 2021 tax return.

Determining The Amount Of Your Credit

When filing for the child tax credit refund, you must inform the IRS about your advanced monthly payments. When filing your taxes, the advanced payments will be subtracted from the amount of child tax credit benefit that is still available to you.

In December 2021, the IRS sent letters to families who received the advance monthly credit payments. The purpose of the letters was to assist the families in determining how much child tax credit payments they are still entitled to.

Obtaining the CTC if No Advance Payments Were Made

For many reasons, some families eligible for the Child Tax Credit did not receive advance payments.

  • In 2019 and 2020, they failed to file their taxes.
  • They welcomed a new child into their family in 2021
  • They opted out of receiving advanced payments
  • Another taxpayer listed their dependents

Filing taxes will enable qualified families to obtain the full amount of the credit they are entitled to.

Due to the expanded child tax credit, taxpayers with children aged 6 and 17 in 2021 were eligible for a credit of up to $3,000. The sum increased to $3,600 for children under the age of 6. That sum changed back to $2,000 per dependent kid 16 years old or younger in 2022.

Last year, the tax credit was also completely refundable, which meant that if a person qualified for more credit than they were obligated to pay in taxes, they could get the extra money back. Additionally, there was no minimum income needed to qualify for the return.

As per your income in 2022, the tax credit will only be refundable up to $1,500 (an increase from $1,400 in 2020 to account for inflation), and you must have earned income of at least $2,500 to even be qualified for the child tax credit refund.

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