Advance Child Tax Credit payments are on the way to millions of Americans today. They’ll be followed by continued monthly payments through the end of this year.
Qualifying families will receive up to $3,600 per eligible child in 2021, thanks to an expanded Child Tax Credit under the American Rescue Plan stimulus package that passed in March 2021. Unless you opt out, you’ll get half of the amount you’re eligible for in the monthly payments that start today, and the rest next year when you file your 2021 tax return.
The IRS has also released a set of online tools to help you manage payments and eligibility. Families of more than 65 million U.S. children will receive advance monthly payments, according to the IRS.
Here’s what you need to know about the payments:
Am I Eligible for the Child Tax Credit?
You must meet a few criteria to qualify for the credit:
- Have an eligible child under age 18 at the end of 2021
- Filed a 2020 or 2019 tax return in which you claimed the Child Tax Credit (or submitted your information to the IRS using the Non-Filer tool)
- Live in the United States for at least half of 2021
- Meet income eligibility requirements
Your eligibility for the Child Tax Credit and the amount you’ll receive are estimated based on the income reported in your most recent tax return. You may receive less than the full amount or be phased out altogether because of your income.
Because it’s an estimate, it’s important to consider any significant changes in your income since you filed your 2020 tax return. If you earn more and think you might no longer qualify, you may want to opt out to avoid repaying next tax season.
If you are eligible, you’ll be automatically enrolled in advance Child Tax Credit payments. You should have received a letter from the IRS last month notifying you of your eligibility. If you didn’t, and want to check to see if you qualify, you can use the new eligibility assistant tool.
How Much Will I Get from the Child Tax Credit?
Eligible families can now claim up to $3,600 per qualifying child under age 6, and $3,000 per qualifying child between 6 and 17. Unlike in previous years, this includes children who turn 17 this year. Previously, parents could only claim up to $2,000 per eligible dependent child under age 17.
Half of the full amount you’ll receive this year will be sent in six monthly installments starting July 15. That means you’ll receive six payments of up to:
- $300 monthly per eligible child under age 6
- $250 monthly per eligible child age 6 through 17
But the exact payment amount you receive may differ based on your modified adjusted gross income (AGI) from your latest tax return. What does that mean? You can receive the full amount if your income falls under these thresholds, depending on your filing status:
- Single: $75,000
- Head of household: $112,500
- Married filing jointly: $150,000
If your income exceeds these benchmarks, you’ll get $50 less for every additional $1,000 (or fraction thereof) you make.
Even if your income disqualifies you from the expanded credit, you can still qualify for the original $2,000 tax credit. The previously set income limits remain the same if this is the case for you, also based on how you file:
- Married filing jointly: $400,000
- All other filing statuses: $200,000
Again, after you reach these income thresholds, you’ll get $50 less for every additional $1,000 (or fraction thereof) you make.
You can also expect to receive another letter from the IRS in the coming weeks providing more detailed information, including the payment amounts your family will receive. But if you want to check your status now, you can use the payment management and eligibility assistant tools on the IRS website.
How Will I Receive the Child Tax Credit?
You’ll receive your payments either through direct deposit or mailed check. The IRS uses the bank account information in your latest tax return — or the information you submit through the agency’s online portal — to issue your payment.
If you’re not required to file a return (typically this applies to those below a certain income threshold), you can use the Non-Filer tool to enter your banking information or address, to ensure your payment.
Anything Else I Need to Know?
The new advance payments begin July 15 and will continue on a regular monthly schedule through the end of 2021:
- July 15
- Aug. 13
- Sept. 15
- Oct. 15
- Nov. 15
- Dec. 15
You can also unenroll from these payments at any time. Use the Child Tax Credit Update Portal to opt out of advance payments and receive the credit you’re eligible for in full next year, when you file your tax return. According to the IRS, this may be a good option for you if:
- You received a pay increase since the income reported on your 2020 return, phasing you out of eligibility
- You lived outside the U.S. for more than half of 2021
- Someone else (like an ex-spouse) can claim your children as dependents on their tax return in 2021
The Update Portal also allows you to manage your payment history and banking information. If you want to make sure you get your payment as quickly as possible, ensure your banking information is updated with the IRS today so you can receive future monthly installments through direct deposit.