If you have kids, you’re probably familiar with the child tax credit. It saves you hundreds and possibly thousands of dollars every year when you file your taxes. During the 2021 tax year, you're likely to save even more money thanks to recently passed legislation.

The American Rescue Act passed in March 2021 did more than provide $1,400 stimulus payments and extend unemployment benefits to the tune of an extra $300 per week. It also expanded the child tax credit for the 2021 tax year. This year, the child tax credit has been expanded from $2,000 per child to $3,000 per child over the age of 6, and $3,600 per child under the age of 6.

The expanded tax credit also gives families the option of receiving it in the form of monthly payments that would begin no sooner than July 2021 and end in December 2021.

That means a family with two kids under 6 years old would be eligible for a monthly installment of $600. A family with four kids under 6 years old would theoretically be eligible for a $1,200 monthly payment.

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The expanded tax credit begins to phase out for single filers making more than $75,000 a year and joint filers making more than $150,000. It only applies for 2021.

It's worth noting that a person's eligibility for the expanded tax credit is not based on the number of kids they had in 2020, but the number of kids they will have by December 31st, 2021.

In other words, you can consider the expanded tax credit if you receive it as a monthly installment as an advance on 50 percent of the tax credit you will be claiming when filing your 2021 taxes in 2022.

To calculate what your expanded child tax credit might be, visit this website.

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