Invest in your child’s future with the enhanced child tax credit

Contained in the $1.9 trillion American Rescue Plan signed into law in March was good news for families with children due to big changes to the Child Tax Credit.

Those changes include increasing the value of the credit, making the credit available to families with older children, and making the credit fully refundable. Unlike most tax credits, half of the credit can be distributed to families as monthly cash payments beginning in July. The other half will be credited at tax time next spring.

Parents should begin planning now on using the 2021 Tax Credit Cash payments to invest in the children’s future. With these changes, Catholic education is more affordable than ever.

Child Tax Credit Payments for tuition

As part of the $1.9 trillion Covid relief bill passed in March, the 2021 Child Tax Credit was increased to as much as $3,600 per qualifying child under 18. The American Rescue Act of 2021 allows parents to get monthly checks in 2021 as an advance payment on their 2021 Child Tax Credit. Under the cash payment program, families can get six monthly payments from the U.S. Treasury via direct deposit starting in July and running through December 2021.

By way of example, if a family qualifies for a $3,000 Child Tax Credit, they could get six $250 payments between July and December (for a total of $1,500) and then claim the remaining $1,500 on their taxes.

Parents should make plans now for using some or all their monthly payments for Catholic school tuition to invest in their children’s future. It is also important for families to remember these payments are temporary, so they should plan on the best way to invest these game-changing payments.

Additionally, for the 2021 tax year, the Child and Dependent Care Credit allows families to claim up to 50% of up to $8,000 of childcare costs for a child under 13, if both parents are working, full-time students or looking for work. Preschool tuition and before/after school care is considered dependent care. Additionally, for the 2021 tax year, the credit is refundable.

Working parents of school-aged children should contact their preferred preschool or before/after school care program now to reserve a spot for the fall.

Visit www.CEFJoliet.org for more detailed information or contact the CEF Office at (815) 221-6127 to see how you can use the Enhanced Child Tax Credit or Dependent Care Credit to invest in a child’s future through Catholic education.

Catholic Education Foundation : 815.221.6127 : 16555 Weber Road, Crest Hill, IL 60403: http://cefjoliet.org/