Expanded Child Tax Credit: Boost for Iowans’ pocketbooks starts July 15

The federal American Rescue Plan is the biggest piece of anti-poverty legislation in more than 50 years. It’s putting money into Iowans’ pocketbooks and lifting thousands of Iowa children out of poverty.

One of the key features, an expanded  Child Tax Credit, will provide major tax relief for nearly all families:

• 93% children under 18 qualify. That’s 669,000 Iowa kids.
• 198,000 Iowa kids under 17 left out of the full $2,000 Child Tax Credit in prior law will benefit.
• 48,000 Iowa kids under 18 will be lifted above or closer to the poverty line by the expansion.

How it works

All working families making up to $150,000 per couple or $112,500 for a single-parent family will get the full Child Tax Credit, which has been expanded to $3,000 per child for kids ages 6-17 and $3,600 per child for kids under 6.

Starting July 15, payments will be made monthly (via direct deposit for most families and by mail for some)—$250 per child age 6-17 or $300 per child under 6.

If you filed tax returns for 2019 or 2020, or if you signed up to receive a stimulus check from the IRS, you will get this tax relief automatically. You do not need to do anything.

If you didn’t make enough to file taxes in 2019 or 2020, you can still get the Child Tax Credit. Families not automatically enrolled in the program can check their eligibility and enroll at irs.gov/credits-deductions/child-tax-credit-non-filer-sign-up-tool.

Generally, a couple making less than $24,800, a head of household earning less than $18,650 or a single filer making under $12,400 will qualify.

The tax credit is based on your income for 2021, which are the taxes that get filed in April 2022. The automatic pre-payment feature allows you to receive your tax credit in monthly payments starting July 15. However, if you wish to receive your tax credit in one lump sum, you may decline the advance monthly payments at irs.gov/credits-deductions/child-tax-credit-update-portal.

Learn more about the largest Child Tax Credit ever at ChildTaxCredit.gov.

You may not want advance payment on Child Tax Credit

More help for your pocketbook

According to an estimate by the Urban Institute, the American Rescue Plan will reduce overall poverty in the U.S. by a third and cut child poverty by more than half. It’s also putting more money into your pocketbook:

• A third round of economic impact payments of up to $1,400 went to 91% of Iowa adults and 89% of Iowa children this spring.
• Expanding the Earned Income Tax Credit and the Child & Dependent Care Credit.
• Providing emergency housing and rental assistance.
• Expanding food stamp benefits.