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What is the Child Tax Credit?

Understanding the kid tax credit score begins with realizing a little bit extra about tax credit typically. 

So what does tax credit score imply? In easy phrases, tax credit scale back the quantity of taxes you owe on a dollar-for-dollar foundation. Claiming sure credit can enhance your refund or provide you with a refund, even if you happen to don’t owe any taxes. 

Now, what’s a baby tax credit score? 

Merely put, it’s a tax profit for individuals who have youngsters. The common little one tax credit score is designed for individuals who declare a qualifying little one as a dependent. 

There’s additionally an extra little one tax credit score. By way of what’s extra little one tax credit score, this credit score is on the market to sure individuals who don’t qualify for the total common little one tax credit score. The extra little one tax credit score can provide you a refund even if you happen to don’t owe any taxes. 

These are the conventional tax guidelines that apply to the kid tax credit score. However what’s the little one tax credit score for 2021? 

Below the American Rescue Plan, the kid tax credit score expands the quantity of the credit score itself and delivers funds to households month-to-month. This enhanced credit score is totally refundable so, even if you happen to don’t owe taxes, you may nonetheless profit from it.

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