Child Tax Credit & Child and Dependent Care Credit

Investing with Families is a year-long initiative from the Office of Head Start to help move Head Start Forward. It will focus on sharing important American Rescue Plan (ARP) benefits information with Head Start programs, staff, families, and communities.

The ARP delivers critical tax relief for families with children, including families who are not required to file taxes. The new Child Tax Credit is the largest child tax credit ever. The ARP also expands the size of the Child and Dependent Care Credit. Help spread the word by sharing this information with staff and families.

Child Tax Credit

The ARP created a monthly child allowance to replace the current Child Tax Credit. Beginning in July 2021, families who qualified for this year’s Child Tax Credit on their tax return will receive monthly payments of $300 per child under age 6 and $250 per child aged 6–17. This is advanced tax relief; normally, tax relief comes the following year when you file your taxes. With the ARP Child Tax Credit, families should start receiving monthly payments in July.

The full payment amount is based on the number of children claimed as dependents on a family’s most recent tax return (2019 or 2020). Individual Taxpayer Income Number (ITIN) holders, including immigrant families with children who have social security numbers, are eligible to receive this credit. This one-year program will end on Dec. 31, 2021.

What can program staff and families do?
If a family filed taxes for 2019 or 2020 or signed up to receive a stimulus check from the Internal Revenue Service, this tax relief will come automatically. There is no action to take.

If a couple makes under $24,800, a head of household makes under $18,650, or a single filer makes under $12,400 and they have not filed their taxes, they can sign up for the Child Tax Credit following these steps:

  • Go to Child Tax Credit for Non-filers.
  • Be ready with a reliable mailing address, email address, and the ITIN and social security numbers for you and your children.
  • Provide bank account information to receive your payment safely and securely by direct deposit.

To ensure families receive monthly payments starting in July, families should file a 2020 tax return as soon as possible. Families will retroactively claim this allowance from January–June 2020 on next year’s tax return.

Child and Dependent Care Credit

Parents are eligible for this tax credit if they needed care for any child under age 13 or a disabled dependent of any age while working or looking for work. This includes any amount paid (full or co-pay) for center-based child care, babysitter care, summer camp, or care by adult relatives outside of the tax household. ITIN holders, including immigrant families with children born in the U.S with a social security number, are eligible to receive this credit.

What can program staff and families do?
Families should keep records of their child care expenses to report on next year’s tax return. Even those who do typically file taxes should file because the credit will be fully refundable and could result in a tax refund.

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