The whirlwind of tax changes just keeps going. Now, if you have children 17 or under there is a new, higher child tax credit in place for 2021. Here is what you need to know:

Age matters. The old credit was for children under the age of 17. The new credit goes through age 17 and includes an increased credit for children under the age of 6.

The new credit amount. The child tax credit goes from $2,000 per qualifying child up to $3,000 per child. The amount increases to $3,600 per child if your child is under the age of six.

Fully refundable. You will get the child tax credit even if you do not owe tax. The old rules required $2,500 in minimum earnings and only up to $1,400 of the credit was refundable.

Phaseouts just got a lot more complicated. As with the past child tax credit, you can only receive the credit if your income is below a threshold amount. The $200,000 threshold for unmarried taxpayers and $400,000 threshold for married taxpayers is still in place for the first $2,000 of the 2021 credit. To get the entire $3,000 or $3,600 credit in 2021, your adjusted gross income must be under $75,000 for single taxpayers, $112,500 for head of household taxpayers, and $150,000 for married taxpayers.

New periodic payments. The new child tax credit also allows you to receive monthly payments for 50 percent of the credit from July 2021 through December 2021. There will be a new IRS website to opt-out of receiving monthly payments if you prefer to receive your entire child tax credit when you file your 2021 tax return in 2022. Find the new website here and the dates to opt-out from monthly payments.

Unless noted, the other requirements to receive the child tax credit stay in place. So you must still pass rules for the relationship test and support tests to qualify. As always, should you have questions please feel free to contact us. And remember, this advice is general and not meant to be taken into account without talking to your tax advisor about your own individual circumstances.

Remember folks, never take advice from strangers on the internet! Always talk to your own tax preparer about your specific situation. These posts are meant to educate and inform, and aren't to be taken as actionable advice.