Thousands of American families may miss out on up to $3,600 per child in tax credits from 2021. The expanded Child Tax Credit, part of the American Rescue Plan passed during the pandemic, provided substantial relief to families, but many eligible parents never claimed these funds. With the April 15 deadline approaching, taxpayers have a final opportunity to recover these significant benefits before unclaimed funds are returned to the U.S. Treasury.
Understanding the Child Tax Credit in 2024
The Child Tax Credit (CTC) currently provides eligible taxpayers up to $2,000 per qualifying child under 17 years of age. For tax years 2024 and 2025, up to $1,700 is refundable, meaning families can receive this money even if they owe fewer taxes than the credit amount. This refundable portion is the Additional Child Tax Credit (ACTC), which requires filers to have at least $2,500 in earned income or three or more qualifying dependents to claim.
The goal of our nation-leading Child Tax Credit is simple: lift kids out of poverty and get money back to working families.
Last year, nearly 225,000 families claimed the Child Tax Credit and saw an average total credit of $2,500. pic.twitter.com/7RcAeQCsni— Governor Tim Walz (@GovTimWalz) February 5, 2025
Eligibility for the full credit depends on modified adjusted gross income (MAGI) and filing status. Married couples filing jointly qualify for the full credit with incomes of $400,000 or below, while all other filers qualify at $200,000 or below. For those with incomes exceeding these thresholds, the credit reduces by $50 for each $1,000 over the limit. Additionally, a separate $500 credit for other dependents is available for qualifying dependents who don’t meet the requirements for the regular CTC.
Claiming the Expanded Credit from 2021
The American Rescue Plan Act significantly enhanced the Child Tax Credit for 2021 tax year, increasing the maximum benefit to $3,600 for children under six and $3,000 for children ages 6 to 17. Unlike the standard credit, this expanded version was fully refundable, allowing even low-income families with minimal or no earnings to receive the full amount. Many families received monthly advance payments of this credit during 2021, but others missed out entirely.
Special tax credits, such as the Earned Income Tax Credit, and deductions can help parents offset the costs of raising a child. Parents should check for benefits when they prepare their tax return: https://t.co/Xm1UscobOE #IRS pic.twitter.com/aY7NzVR85o
— Oregon Revenue Dept. (@ORrevenue) March 19, 2025
“If you had kids in 2021 and didn’t claim the expanded Child Tax Credit, you might still be able to get that money. If you never filed your 2021 return, you’ll need to do so to check your eligibility. If you did file but didn’t claim the credit, you may need to amend your return.”
To claim this enhanced credit retroactively, taxpayers must file or amend their 2021 tax returns by April 15, 2024. The IRS estimates that thousands of families who didn’t file taxes that year may still be entitled to these benefits. To qualify, children must have been under 18 at the end of 2021, possess a Social Security number, and meet specific residency and support criteria.
Special Considerations for Divorced or Separated Parents
Determining who can claim the Child Tax Credit requires careful attention for divorced or separated parents. While court orders may specify which parent can claim the credit, federal tax law ultimately governs eligibility. In cases where both parents might qualify, the IRS typically awards the credit to the parent with whom the child lived for most of the year. Formal agreements should specify which parent will claim the credit for children living equally with both parents.
Parents can use IRS Form 8332 to release or revoke a claim to the credit. If both parents attempt to claim the same child in a given tax year, the IRS will address the dispute, potentially requiring repayment from the ineligible claimant. Tax professionals recommend keeping detailed records of where children spend their time in contentious situations, as violations of CTC agreements can lead to enforcement actions or breach of contract lawsuits.
Future of the Child Tax Credit
The Tax Policy Center estimates that 90 percent of families with children received an average Child Tax Credit of $2,390 in 2022. However, the future of this benefit remains uncertain. Without Congressional action, the credit will revert to $1,000 in 2026 when provisions from the Tax Cuts and Jobs Act expire. Additionally, income eligibility thresholds will lower substantially, potentially reducing access for middle-income families.
“It was one of those rare government programs that made an immediate difference. If you qualified but somehow missed claiming it on your tax return, there’s still hope! You’ve got until April 15 of this year to file an amended return and recover what could be thousands of dollars.”
To claim the regular Child Tax Credit on your 2024 tax return (filed in 2025), you’ll need to complete Schedule 8812. Taxpayers should know that refunds for returns claiming the ACTC are not released until mid-February, with electronic filers typically receiving refunds around March 3. Consulting a qualified tax professional is recommended for specific guidance related to your tax situation.
Sources:
https://www.nerdwallet.com/article/taxes/qualify-child-child-care-tax-credit
https://www.bankrate.com/taxes/child-tax-credit-what-to-know/
https://www.usa.gov/child-tax-credit
https://taxpolicycenter.org/briefing-book/what-child-tax-credit
https://www.newsweek.com/americans-may-eligible-3600-tax-credit-whos-eligible-how-claim-2048018