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Families to receive up to $300 monthly under federal Child Tax Credit

The American Rescue Plan Act of 2021 expands the Child Tax Credit for the 2021 tax year only.

PORTLAND, Maine — Families with children will soon receive direct monthly payments from the federal government as part of an increase to the Child Tax Credit.

The American Rescue Plan Act (ARPA) of 2021 expands the Child Tax Credit (CTC) for tax year 2021 only, according to the IRS.

Families claiming the CTC will receive up to $3,000 per qualifying child between the ages of 6 and 17 at the end of 2021. They will receive $3,600 per qualifying child under age 6 at the end of 2021.

Under the prior law, the amount of the CTC was up to $2,000 per qualifying child under the age of 17. 

That means, for each child under the age of six, a family will receive up to $300 per month. For each child between the ages of 6 and 17, they will receive up to $250 per month.

"Up to" is key: The federal government determines how much you receive per child based on your income.

The increased amounts are phased out for incomes greater than $150,000 for married taxpayers filing a joint return and qualifying widows or widowers, $112,500 for heads of households, and $75,000 for all other taxpayers.

The IRS urges people with children to file their 2020 tax returns as soon as possible to make sure they're eligible for the appropriate amount of the Child Tax Credit and any others they might be eligible for, such as the Earned Income Tax Credit. Filing electronically with direct deposit also can speed refunds and future CTC payments.

Some people are calling on lawmakers to make the change to the CTC permanent.

In statements, U.S. Senators Susan Collins and Angus King responded to these concerns.

"Senator Collins has long championed efforts to ensure our tax code promotes job growth and supports families, and she will continue to look for responsible ways to build on that progress," wrote a spokesperson for Sen. Collins.

"Senator King was proud to vote for the American Rescue Plan for a number of reasons – among them, the immense impact the expanded Child Tax Credit will have on Maine families. He is grateful that these funds will help families across our state make ends meet and speed Maine’s overall recovery from the coronavirus pandemic," a spokesperson for Sen. King said.

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