Table of Contents
- 1 Payment schedule for the 2021 child tax credit
- 2 Timeline for the child tax credit payments
- 3 Details for low-income families, or those considered ‘nonfilers’
- 4 Major changes in this year’s expanded child tax credit
- 5 Age requirements for dependents
- 6 2021 child tax credit maximum payments
- 7 New babies can qualify
- 8 Parents with shared custody
- 9 Household income limits and thresholds
- 10 Opting out of the advance monthly payment program
- 11 Child tax credit portals accessible later this month
- 12 Payments will come by mail or direct deposit
- 13 Returning money to the IRS in case of an overpayment
- 14 Child tax credit expansion is temporary but may be extended
After months of people waiting, new resources are coming on deck for the 2021 child tax credit, which will benefit roughly 90% of US households with kids. Families that qualify are receiving IRS notices with payment timelines and information on how much they’ll receive overall. If you didn’t receive the IRS letter, you may still be eligible for this expanded tax relief — you’ll just have to take a couple of extra steps starting now.
Also, the White House has started a new website with useful details and announced that Monday, June 21, will be Child Tax Credit Awareness Day, an event meant to provide families with more information on the credit. Here’s a recap: On July 15, families with qualifying dependents could get $300 monthly for each child under age 6 (or $250 monthly for older dependents). Half the total credit will arrive monthly between July and the end of 2021, and the rest will be part of tax refunds after filing next spring.
Still not sure how much you’re going to receive? Use CNET’s child tax credit calculator. Also, more web tools are being made available as we speak, including a new nonfiler portal and an almost-released portal for opting out of monthly payments. We’ll explain those facts and more, including how to claim up to $16,000 in child care expenses and how you’ll be receiving your payments. This story was recently updated.
Payment schedule for the 2021 child tax credit
The first child tax credit check will arrive July 15 and is automatic for households that qualify. The first six payments totaling half the credit will arrive monthly, targeting the same day of the month — though you may not receive the payment on the exact same day every month, especially if you get a paper check instead of a direct deposit payment.
For Aug. 15, which is a Sunday, the IRS said the payment will go out Aug. 13. The checks will end in December, with the remainder of the credit coming next year after taxes. Here’s a rough schedule:
Timeline for the child tax credit payments
|Monthly||Maximum payment per child 5 and younger||Maximum payment per child; 6 to 17|
|July 15: First 2021 check||$300||$250|
|Dec. 15: Last 2021 check||$300||$250|
|April 2022: Second half of payment||$1,800||$1,500|
Details for low-income families, or those considered ‘nonfilers’
Payments will be automatic for those who filed their 2020 tax returns by the May 17 deadline (or those who claimed all their dependents on a 2019 tax return). But what if that’s not you? Non-tax filer parents should use the new IRS tool, called the “Non-filer Sign-up tool” to get their money, even if you’re not usually required to file. This will let the IRS know your income and how many dependents are in your household who count toward the child tax credit benefits. (Here’s more information about the IRS portals, including for those who don’t usually file taxes.)
You could also file a tax return to get the full monthly child tax credit payment you’re owed. The IRS is offering information about free tax days in major cities to outreach to families who still need to file a 2020 return.
Major changes in this year’s expanded child tax credit
The first thing to know is you won’t get your child tax credit payments all at once in 2021. The credit part means the amount you owe on your 2021 taxes (which you file in 2022) will be reduced by the “credit” you gain from your eligible dependents. That could either decrease the amount you owe the IRS or else increase your tax refund. The idea is to bring you money sooner, which is why the checks will start coming in 2021 as “advance payments.”
This logic also explains why your 2021 child tax credit is split into two parts. The first half in 2021 will come as advance monthly installments you can start using right away. The second half will apply to your 2021 taxes next year.
Age requirements for dependents
How the payments will be divided between 2021 and 2022 might be confusing. For each qualifying child age 5 and younger, up to $1,800 (half the total) will come in six $300 monthly payments this year. For each kid between the ages of 6 and 17, up to $1,500 will come as $250 monthly payments six times this year.
The IRS bases your child’s eligibility on their age on Dec. 31, 2021, so 5-year-old children turning 6 in 2021 will qualify for a maximum of $250 per month. For both age groups, the rest of the payment will come with your 2021 tax refund when you claim the remainder of the tax credit in 2022. Here’s how to calculate your family’s total amount, including a monthly breakdown.
If your dependents are 18 years old, they can qualify for $500 each. Dependents between the ages of 19 and 24 may qualify as well, but they must be enrolled in college full-time. Here’s more on the financial details for qualified dependents.
2021 child tax credit maximum payments
|Ages 5 and younger||Up to $3,600, with half as $300 advance monthly payments|
|Ages 6 to 17||Up to $3,000, with half as $250 advance monthly payments|
|Age 18||$500 onetime check|
|Ages 19 and 24, full-time college students||$500 onetime check|
New babies can qualify
If you have a baby in 2021, your newborn will count toward the child tax credit payment of $3,600. Children who are adopted can also qualify if they’re US citizens.
For the first two stimulus checks, some parents who shared custody of a child but weren’t married to each other were entitled to each claim money for the same child. That was only if they alternated years for claiming the dependent — in other words, if one parent claimed the child on their taxes in odd years and the other claimed the child on their taxes in even years.
This is no longer allowed for the third check, and we’re told it won’t work that way for the child tax credit payments either. Here’s what we know so far about the child tax credit and shared custody situations.
Household income limits and thresholds
Income limits do determine how much you will receive and if you even qualify, though there is no limit on the number of children you can receive credit for as long as you’re eligible. The amount you’ll get will phase out for people with higher incomes: singles earning more than $75,000 per year, heads of household earning more than $112,500 per year and married couples earning more than $150,000 a year. Your child tax credit payments will begin to phase out by $50 for every $1,000 of income over those threshold amounts, according to Joanna Powell, managing director and certified financial planner at CBIZ.
Opting out of the advance monthly payment program
You aren’t obligated to receive monthly child tax credit payments this year. Instead, you can choose to get one payment in 2022, and the upcoming Child Tax Credit Update Portal will allow you to do so. You may want to opt out if you’d rather have one large payment for a projected expense next year, or if you’re concerned the IRS might overpay you this year and you don’t want to be saddled later with an outstanding debt.
Child tax credit portals accessible later this month
The IRS will have the online tools and portals by the end of this month. One portal that’s now open is for people not normally required to file an income tax return, including low-income families, as described above. An interactive Child Tax Credit eligibility assistant will soon be launched to help families determine whether they qualify.
The upcoming Child Tax Credit Update Portal will allow families to update their information if their circumstances have changed, for example, if a new child has arrived or will arrive in 2021 who isn’t reflected on a 2020 tax return. That portal will also allow families to opt out of the monthly payments if they prefer to receive one big payout for the total amount when they file taxes in 2022.
Payments will come by mail or direct deposit
The way your child tax credit money arrives could very well depend on how you receive your stimulus money. Most people will receive child tax payments by direct deposit, but the IRS will also send paper checks and funds on debit cards. If the IRS does not have your current bank information or mailing information, you should try to update that before payments come.
For stimulus checks, people who received Social Security benefits like SSI or SSDI got $1,400 payments on a Direct Express card. Veterans who don’t normally pay taxes might also have a different delivery method. We’ll update this when we have more information about the kind of debit cards you may receive.
Returning money to the IRS in case of an overpayment
Since the IRS uses your 2019 or 2020 tax return, your family may not qualify for the child tax credit payment when you file your 2021 tax return in 2022. In this case, you will have to repay some or all of the credit back to the IRS. The child tax credit rules aren’t as flexible as the stimulus check rules regarding overpayment. One example of this happening is if you and the other parent of your child (who is not your spouse) are both paid for the child tax credit for the same dependent.
To avoid this tax inconvenience, make sure all your information is updated before the payments start arriving. The future portal will allow you to make adjustments.
Child tax credit expansion is temporary but may be extended
The last advance payment of the child tax credit is scheduled to go out by Dec. 31, with the rest coming in 2022 with tax season. But President Joe Biden stated that the higher payments may last until at least 2025. He presented his American Families Plan proposal to extend the payments, urging in an April 28 speech: “Together, let’s extend the Child Tax Credit at least through the end of 2025.” It’s up to Congress to approve his request.
For more information, here are the top things to know about the $3,600 child tax credit. Plus, here’s how to track your tax refund and how to track your stimulus check.