Understanding the Enhanced Child Tax Credit

The enhanced child tax credit can benefit nearly every kid in West Virginia

The enhanced child tax credit (CTC) is part of the federal government’s relief package (American Rescue Plan Act, or ARPA) to help families during the pandemic. In 2021, this plan increases the amount of money that families with children can get refunded from their taxes – up to $3,000 for six to 18 years old and $3,600 for children under six. The plan also helps families with low or no income get their fair share too. If made permanent, the enhanced CTC is a very powerful tool that can help up to 93 percent of West Virginia kids get the tools they need for a brighter future.

How is the CTC different this year?

The enhanced CTC temporarily improves the traditional credit in several important ways:

• It increased the credit by $1,600 for every child under age 6 — from $2,000 to $3,600 — and by $1,000 for every child between 6 and 17 — from $2,000 to $3,000. Filers may also receive an additional $500 for some dependents up to 24.
• The credit now covers 17-year-olds and is available to very low- or no-income families who previously were not eligible. 
• For the first time it is fully refundable. That means that you may use it to reduce your tax to zero, and then receive a payment from the IRS — a refund — for any credit remaining. 
• Half of the CTC is paid monthly, in advance. This is a way to help families pay their bills as they come due instead of having to wait until they file their taxes next year.

The enhanced CTC is a powerful anti-poverty tool.

By temporarily improving the CTC, the enhanced CTC not only reaches more West Virginia kids – it also increases the amount of money the lowest-income families will receive. Experts expect the credit to reach most of West Virginia’s 400,000 children – and get more assistance to families that need it most.

The next payment is on September 15, 2021.

If you claimed the CTC in 2019 or 2020, these payments have already begun – no further action is needed! If you have children but have not previously claimed the CTC or filed taxes, you will need to take further action to start receiving refunds. Those who have not previously filed taxes will also receive a stimulus payment. Claiming these payments will not disrupt any of your benefits – including Medicaid, CHIP, SNAP, WIC, WV Works, and others.

Unsure if you qualify? 

Scan the QR code here or go to bit.ly/getCTC2021 to check your eligibility, submit your information, and learn more.  

The enhanced child tax credit sunsets at the end of 2021 without further legislative action.

Experts estimate that the enhanced CTC will lift 43 percent of West Virginia kids out of poverty if made permanent. According to a wide body of research, the CTC has long-term benefits on educational attainment, health, earnings, and work. Legislators on the federal level must take action to ensure a brighter future for our children.

For a shareable version of this information, check out our Child Tax Credit explainer: https://wvpolicy.org/wp-content/uploads/2021/09/ctc-explainer.pdf