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Child Tax Credit Payments to begin in July

Child Tax Credit increased for 2021

The American Rescue Plan legislation increased the $2,000 Child Tax Credit to $3,000 for each child age 6-17 and $3,600 for each child age 5 and younger. The full amount of this expanded credit is available to Single filers making $75,000 or less, Head of Household filers making $112,500 or less, and Married taxpayers filing Jointly who make $150,000 or less. The Child Tax Credit remains at $2,000 per child for Single taxpayers making up to $200,000 and Married couples making up to $400,000.

The IRS will begin sending monthly Child Tax Credit payments in July

In addition, the IRS will begin sending monthly payments to qualifying taxpayers who claimed the Child Tax Credit on their 2020 tax return. The monthly payments will be $250 for each child age 6-17 and $300 for each child age 5 and younger. The payments will begin in July and end in December, for a total of 6 monthly payments. The payments will total $1,500 for each child age 6-17 and $1,800 for each child age 5 and younger. The payments will be reduced for taxpayers who earn more than the above income thresholds.

These are considered “advance payments” of the Child Tax Credit, so the amount you receive will be subtracted from the Child Tax Credit on your 2021 tax return. Thus, if you have one child age 17 you will get $1,500 in monthly payments, and a credit of $1,500 on your 2021 tax return, for a total Child Tax Credit of $3,000.

How do I find out if I am eligible?

Click Here to access the Advance Child Tax Credit Eligibility Assistant on the IRS website to see how much you qualify to receive.

What do I need to do to receive the monthly payments?

If you have already filed your 2020 tax return, you do not need to do anything. You will begin receiving payments automatically. If you received a 2020 tax refund via direct deposit, your payments will be directly deposited to the same bank account. Otherwise, the IRS will mail you a check each month.

What if I don’t want monthly payments?

You can opt-out of receiving monthly payments if you wish. If you do this, then the full amount of the Child Tax Credit will be available on your 2021 tax return, and your tax refund next year will be higher. (Or, if you owe taxes, the amount you owe will be lower.) If you owe back taxes, you will still get monthly payments. But if you would rather apply your monthly payments to your back taxes, you can opt-out of the payments. To opt-out, Click Here to access the Child Tax Credit Update Portal on the IRS website.

What if my information has changed?

If you have changed your address or bank account, or your family size has changed (e.g. a new child is born in 2021), you will eventually be able to make these changes on the IRS website Child Tax Credit Update Portal as well. The IRS is still working on these features so if you don’t see them yet, keep checking back.

Where can I get more information?

For more information about the Advance Child Tax Credit Payments, Click Here to go to the IRS website.