Taxes, Stimulus Payments, and the Child Tax Credit – New Provisions in the American Rescue Plan

The American Rescue Plan Act (ARPA) was signed into law on March 11 and includes several tax-related components which will have a substantial impact on WNC residents with low incomes during the 2021 tax year and potentially going forward permanently. We encourage you to share this information across your networks so that people in need can take advantage of these provisions.

The IRS has extended the filing deadline to May 17th, 2021, and we strongly encourage you to complete your taxes even if you have never filed before. This year is especially important to file if you have not received one or more stimulus payments and if you have a child(ren) under age 17.

Stimulus Payments and Child Tax Credit

• You might not have gotten all of the money you and your family are owed. If you don’t have earnings from work or you get disability benefits, you can get your full stimulus payments by filing taxes now.
• If you or someone you know did not qualify for a stimulus payment before, you might qualify for one now. The rules about who can get stimulus payments keep changing. File taxes to see if you are owed money, and to make it easier to get money in the future.
• ARPA includes an expanded Child Tax Credit for 2021.  This plan includes $3600 for children ages 0-5 years and $3000 for children ages 6-17.
• The IRS will send periodic payments from July-December but are still deciding if the payments will be monthly or quarterly. These payments will account for half of the 2021 child tax credit. The second half could be claimed when filing 2021 tax return.
• You must file your 2020 taxes to qualify for the expanded Child Tax Credit payments.
• Experts expect the ARPA to lift 4.1 million children out of poverty in 2021

Learn more about ARPA and the child tax credits in this analysis from the Brookings Institution and a podcast from NY Times.