What aspect of the Child Tax Credit changed under the American Rescue Plan?

The aspect of the Child Tax Credit that changed under the American Rescue Plan pertains to whether the credit is refundable. Prior to this legislation, the Child Tax Credit was partially refundable, meaning that some eligible families could only receive a portion of the credit as a refund, depending on their income level. Under the American Rescue Plan, the Child Tax Credit became fully refundable, which allowed more families, especially those with low to moderate incomes, to benefit fully from the credit, even if they had little or no tax liability. This significant change aimed to provide greater financial assistance to families with children during a challenging economic time.

The other options do not reflect the changes made by the American Rescue Plan. The age limit for eligible children remained the same, and while some income thresholds were adjusted for higher credits, the maximum income limit for eligibility did not fundamentally change. Lastly, the types of expenses that qualify for the credit were not altered by this legislation. Thus, the focus on the refundability of the Child Tax Credit highlights the key enhancement made to the program to support families more effectively.