Department of Social Services
Family Support Division
PO Box 2320
Jefferson City, Missouri
TO: ALL FAMILY SUPPORT OFFICES
FROM: KIM EVANS, DIRECTOR
SUBJECT: TAX CREDIT CHANGES RESULTING FROM THE AMERICAN RESCUE PLAN ACT (ARPA) OF 2021
DISCUSSION:
The ARPA modified the provisions of several commonly used tax credits. Most of the changes are in effect only for 2021. The following tax credits are refundable, meaning the credit amount can be paid directly to the tax filer if his/her tax liability is $0.
| Child Tax Credit (CTC) | Earned Income Credit (EIC) | Child and Dependent Care Credit |
| A credit increase to $3600 for qualifying children ages 0-5; $3000 for children ages 6 through 17. | The minimum age to qualify for the EIC is lowered to 19 and the maximum age is removed. | The maximum amount of this credit increased to $6000 for one child and $16,000 for two or more children. |
| One-half of the estimated CTC amount is payable to parents in advance monthly payments starting in July 2021; the other half will be issued as part of 2021 tax refunds. | The maximum income for an earner without children is increased to $9820. | |
| Tax filers will be able to opt out of the advance monthly payments. | Some married filers may be treated as unmarried filers in certain circumstances. |
Do not count advance monthly payments or lump sum refunds of a refundable tax credit as income or a resource for Income Maintenance programs. For programs that consider resources, count tax credit funds remaining after 12 months as a resource.
NECESSARY ACTION:
- Review this memorandum with appropriate staff.
KE/ers