What to know about the monthly Child Tax Credit

Wednesday, July 14, 2021

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Starting on July 15, advance Child Tax Credit payments will be sent to some 39 million families who have almost 65 million children, according to the Internal Revenue Service (IRS). Established in March 2021 as part of the American Rescue Plan, the credit gives qualifying families up to $300 a month for each child under 6 years of age and $250 for each child between the ages of 6 and 17.

Families who have filed their 2019 or 2020 tax returns, and non-filers who used the IRS non-filer sign-up tool to receive their COVID-19 stimulus payments (Economic Impact Payments), will automatically be enrolled for the tax credit if they’re eligible. Use the IRS eligibility tool to see if your family qualifies for the tax credit.

Families who don’t usually file taxes because they don’t earn enough income, but have children who are eligible, can register through the IRS’s Child Tax Credit Non-filer Sign-up Tool.

Payments are scheduled to hit bank accounts on July 15, Aug.13, Sept. 15, Oct.15, Nov. 15 and Dec. 15, 2021.

Here’s what you should know about the advance Child Tax Credit:

• The maximum credit families can receive in 2021 is $3,600 for children younger than 6 and $3,000 for those between the ages of 6 and 17. (Click here to estimate how much your family is eligible to receive in 2021).
• The full credit is available to families with an adjusted gross income that is $150,000 or less if married and filing a joint return, or if a qualified widow or widower; $112,500 or less if filing as head of household; or $75,000 or less if single, or if married and filing a separate return. Families earning higher incomes may still qualify for a reduced credit.
• You must have filed a 2019 or 2020 tax return and have lived in the United States for more than six months (or have filed a joint tax return in 2019 or 2020 with a spouse who does).
• Eligible children must have a valid Social Security number and be under age 18 at the end of 2021.
• Check to see if you’re signed up to receive a direct deposit payment from the IRS and which account the payment is being deposited into by using the Child Tax Credit Update Portal. You may also sign up for direct deposit or change a bank account through the portal.
• If you would rather receive your tax credit in one lump sum next year after filing your 2021 taxes, you can opt out of the advance payments through the IRS portal. It’s too late to opt out of the first payment, but you can opt out of the second payment until Aug. 2.
• Defaulted federal student loan borrowers should not see their advance Child Tax Credit intercepted. However, those with unpaid court judgments might see their tax credits garnished. Visit the National Consumer Law Center to learn how you might be able to protect your Child Tax Credit from being seized.

For more information on the IRS advance Child Tax Credit, visit the IRS FAQs page.