top of page
  • Writer's picture Treavor Dodsworth CFP®, CPA, CKA®

#123 - State of the Child Tax Credit

State of the Child Tax Credit

The Child Tax Credit has been in flux recently. In 2021, both the amount of the credit and the timing of when the credit was received changed. There was an expectation a law would be passed to make this change continue (at least for a few years) but what actually happened?

In 2021, the American Rescue Plan expanded the child tax credit to $3,000 for children age 6 to 17 and $3,600 for children under the age of 6 at the end of the year (subject to income-based phaseouts). Generally speaking, one-half of the amount individuals were eligible for was to be paid in equal monthly payments from July 2021 through December 2021. Individuals should be receiving a letter (called Letter 6419) from the IRS that says how much child tax credit they have already received. Taxpayers will use this letter to reconcile the credit when they file their 2021 tax return.

While the Child Tax Credit was expected to be extended, it has not at the time of posting this (1/17/22). Therefore, at this point, the child tax credit has reverted back to $2,000 and the monthly payments are supposed to stop as well.

For families with children, this is a pretty significant change. A young family with three kids under 6, will pay $4,800 more in taxes than they would have had it been extended (assuming they are under the income limitations). It is definitely still possible that the expanded child tax credit is still extended but at this point, for conservative sake, I wouldn’t plan on it in your cash flow.


Interesting Article(s) or Video(s)

  • Ben shows an asset allocation quilt chart over the last 10 years. It is a visual representation that shows the volatility among asset classes.


Thank you for reading!


Thanks! Message sent.

All written content on this website is for information purposes only. Opinions expressed herein are solely those of Sycomore Financial, unless otherwise specifically cited.  Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. The owner of this website takes great care to thoroughly research the information provided to ensure that it is accurate and current. Nonetheless, the content on this website is not intended to provide tax, legal, accounting, financial, or professional advice, and readers are advised to seek out qualified professionals that provide advice on these issues. All information or ideas provided should be discussed in detail with an advisor, accountant, legal counsel, and/or other pertinent professionals prior to implementation. In addition, the owner cannot guarantee that the information on this website has not been outdated or otherwise rendered incorrect by subsequent new research, legislation, or other changes in law or binding guidance. Neither Sycomore Financial or it's owner shall have any liability or responsibility to any individual or entity with respect to losses or damages caused or alleged to be caused, directly or indirectly, by the information contained on this website. In addition, any advice, articles, or commentary included on this website do not constitute a tax opinion and are not intended or written to be used, nor can they be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. Any mention of an investment product or solution is not a recommendation to buy or sell. ETFs that are mentioned may not accurately reflect the market segment mentioned. Past performance is not a guarantee of future results. Any mention of rates or return should not be seen as a guarantee those rates or return will be received.

bottom of page