A number of federal tax credit programs are designed specifically for workers with children and dependents. The goal of these programs is to help workers maintain employment by offsetting the costs related to caring for children and dependents. This section includes general information about tax credits for families, as well as specific information about the Child Tax Credit, the Child and Dependent Care Tax Credit, and the Adoption Tax Credit. In addition, this section explores credits available for those investing in their education and health.
The American Rescue Plan Act was signed into law in March 2021 to provide relief to individuals, families, businesses, and tax-exempt organizations during the ongoing COVID-19 pandemic. Survivors may be eligible to receive $1400 per person through the American Rescue Plan Act (and more if they have children or other dependents). In addition to these economic impact payments, the act includes critical expansions of the Child Tax Credit and EITC, expanded unemployment benefits, and more. For more information on the American Rescue Plan Act and COVID-19 tax relief, see the following resources:
- American Rescue Plan Act Will Help Millions and Bolster the Economy from the Center on Budget and Policy Priorities
- Coronavirus Tax Relief from the IRS
- FACT SHEET: The American Rescue Plan Will Deliver Immediate Economic Relief to Families from the IRS
The American Rescue Plan Act provides for an Advance Child Tax Credit. Here’s what you need to know about the Advanced Child Tax Credit, from the Community Tax Law Project:
- You should file a 2020 tax return. Your eligibility for the credit will likely be based upon the information you report on your 2020 tax return.
- The credit amount increased. The credit amount has been increased from $2,000 to $3,600 for children under 6, and to $3,000 for other children under 18.
- Get payments ASAP. Individuals eligible for a 2021 Child Tax Credit can receive a portion of the credit in advance, via payments starting July 1, 2021 through December 31, 2021.
- Online Portal to update information. The law requires the IRS to create a new online portal through which families can update their information for the credit. More specific information about the portal is not yet available.
- The credit was expanded to include children aged 17 years old. Children 17 years old and younger will now be covered by the Child Tax Credit.