This Tax Day, Many Are Eligible for Larger Refunds Due to Credit Expansions

Tax Day (April 18) is quickly approaching. Thanks to several temporary tax credit expansions, many people — including those who don’t usually file taxes — may qualify for more money in their tax refund than ever before.

These are some of the tax credits that could mean more money for certain tax filers this year:

• Nearly every parent and caregiver of a child age 17 and under is eligible to receive the expanded Child Tax Credit, including those who haven’t filed a tax return previously and don’t have recent income. For tax year 2021, the credit is worth up to $3,600 for each child under age 6 and $3,000 for each child between 6 and 17 years old. Last year’s American Rescue Plan temporarily increased the maximum credit from $2,000 per child, included 17-year-olds for the first time, and made the full credit available to children in low-income families who previously would have received a partial credit or none at all because their families’ incomes were too low. Families who received advanced monthly Child Tax Credit payments between July and December 2021 must file a tax return to get their remaining credit. Families who did not receive monthly payments can claim the entire expanded credit as a lump sum when they file their taxes.
• Many adults who work and don’t have kids at home can get a larger Earned Income Tax Credit (EITC) or qualify for the first time. For tax year 2021, adults without minor children living in their home qualify for an income boost up to about $1,500, almost three times the credit’s maximum absent this one-year expansion. Also eligible for the credit for tax year 2021: people aged 19-24 (excluding students), those 65 and older who work, youth experiencing homelessness, and youth with foster care experience who are at least 18 years old.
• Millions of families paying for child care and care for certain adult dependents may qualify for a more robust Child and Dependent Care Credit. For tax year 2021, this credit is refundable, meaning that families can claim it even if they have little or no tax liability.
• Those who didn’t get their third stimulus payment (generally provided in the spring of 2021) can file to receive the money as a Recovery Rebate Credit. Those who didn’t receive their first and second stimulus payment — which were sizable — will need to file a 2020 tax return to claim those credits.

For the 27 million children who previously received only a partial Child Tax Credit or no credit at all and the 17 million adults who can benefit from the EITC expansion for adults without children at home, this money provides crucial support during the ongoing COVID-19 pandemic and as rising food and energy prices are straining families’ budgets. The monthly Child Tax Credit payments lifted 3.7 million children out of poverty in December, and helped families afford food and other basic needs.

There are free resources available for those who still need to file their taxes to claim these credits. In-person services are available through many local Volunteer Income Tax Assistance and AARP Tax-Aide sites. These sites rely on IRS-certified volunteers who file taxes for free. While many programs will end services on Tax Day, some programs will continue running during the summer. Additionally, Code for America’s free virtual tax filing service, Get Your Refund, will be available until October 15, 2022. Tax filers can use this platform to file their own tax return or get help from an IRS-certified volunteer.

Although Tax Day is approaching, there is no penalty for filing after the deadline if the taxpayer doesn’t owe taxes. Those who didn’t file tax returns in previous years can also file past due tax returns for up to three years from when they are due. And Code for America’s GetCTC is reopening its simplified tax filing service in May to help those without earnings file to claim the expanded Child Tax Credit.

Visit CBPP’s Get It Back Campaign for more information about the importance of tax filing.