Guide to 2021 Child Tax Credit: Amounts, Eligibility
**UPDATE** We have a new calculator from Banzai to help see if you qualify
The IRS will start sending half the total Child Tax Credit in advance monthly payments to millions of families starting July 15, 2021. This is what you should know:
If you have kids and you file taxes, the Internal Revenue Service may start sending you monthly payments until the end of the year. These are advance monthly payments of the 2021 expanded Child Tax Credit.
Read on to find out if you’re eligible, how much you might receive, and how you can get payments due to you.
Will everyone with kids receive payments?
Not everyone will receive payments. Whether you receive a payment depends on the age of your children, where you live, and if you claimed the credit on either your 2019 or 2020 return. It also depends on your income. If you are eligible, the first step is to be sure you filed your 2020 tax return because the IRS needs information such as your address and deposit method from that return to get payments to you.
Families may be eligible if their child is a U.S. citizen with a social security number, and is 18 or younger by the end of 2021. Families with full-time college students through age 24 may also be eligible for payments. (Check out the IRS FAQ for conditions and exceptions if you want more details.)
Eligible children in your care could include your child, stepchild, adopted child, foster child, sibling, half-sibling, step-sibling or a descendent of any of them if they are under age 17 and younger than you.
You may be able to claim children who aren’t related to you in any of these ways under the rules for dependent qualifying relatives (PDF)
Eligibility is also based on your adjusted gross income. If you have a qualifying child and make more than these amounts, your payment will be reduced by $50 for every $1,000 of income:
- $75,000 if you are a single tax filer
- $112,500 if you file as head of household
- $150,000 if you file jointly with your spouse
If you have qualifying children and income within the limits, you’re eligible if you live in one of the 50 U.S. states or Washington, D.C., for more than half the year. Your main home can be any location where you live for more than half the year, including a house, apartment, mobile home, shelter, temporary lodging or other location, and it doesn’t need to be the same location.
I’m eligible. How much will I receive?
The maximum Child Tax Credit payment is $3,600 for each qualifying child up to age 5, and $3,000 for each child age 6-17.
Half of the total amount will come as six monthly payments, so for each kid up to age 5, you would receive six payments of up to $300, and for each kid age 6-17, you’d receive six monthly payments of up to $250. You’ll claim the other half of the credit when you file your 2021 taxes, due April 15, 2022: Up to $1,800 for each child up to age 5, and up to $1,500 for each child age 6-17.
If you have dependents who are 18 years old or full-time college students through age 24, the IRS will make a one-time payment of $500.
If your child changes age groups before the end of 2021, the IRS considers the child in the older group.
The IRS has a tool called the Advance Child Tax Credit Eligibility Assistant to determine if you’re eligible.
We had a baby this year. How will the IRS know to send us payments?
You can either wait until you file your tax return in the spring of 2022 to receive the payment as a lump sum, or you can update your status in the IRS Child Tax Credit Update Portal to start receiving monthly payments.
I’ve claimed the Child Tax Credit before. Is this more than usual?
Yes. Last year, the Child Tax Credit was $2,000 per qualifying child. This year’s credit is expanded as part of the American Rescue Plan.
What do I have to do to receive the monthly payments?
In most cases, nothing, as long as you filed your 2020 tax return. The IRS will send your payment according to the credit union account or bank account information you have on file. If you received a refund or the last stimulus payment, your Child Tax Credit payment would go to the same account.
If you have eligible children and income and lived in the U.S. for more than half the year, but you weren’t required to file a tax return, the IRS has a non-filers tool where you can enter basic information the IRS needs to send your payments.
The fastest way to receive payments is by direct deposit to your financial institution. You can also receive payments by prepaid debit card or on a mobile payment app.
Be aware that there may be processing time before the payment clears your existing account, so the money might not be available on the same day it’s issued by the IRS.
Check to see if you are enrolled to receive advance payments on the IRS Child Tax Credit Update Portal. You can also update your credit union account or bank account information if, for example, you changed to a different credit union or bank.
What are the payment dates?
The IRS will issue six monthly Child Tax Credit advance payments on these dates:
- July 15, 2021
- Aug. 13, 2021
- Sept. 15, 2021
- Oct. 15, 2021
- Nov. 15, 2021
- Dec. 15, 2021
Depending on your financial institution, the funds might not be available right away. This may act similarly to the Stimulus Checks. It may take a couple of days to clear your account.
The fastest way to see if your payment arrived is by setting up deposit alerts, offered by most financial institutions.
What if I don’t have a credit union account or bank account? How will I receive payments?
If you don’t have an account but you decide to open one, you can update your information on the IRS Child Tax Credit Update Portal.
If you are unable to open an account or don’t want to, you might be able to use a reloadable prepaid card to receive your Child Tax Credit payments. Be sure to get a card with an account and routing number you can provide to the IRS.
What if I earned too much but the IRS sends me payments anyway? Will I have to pay them back?
You might. The IRS is basing your 2021 Child Tax Credit on your 2019 or 2020 income information. If your income went up in 2021 because, for example, you got a new job, you might want to check whether you’d still be eligible. If not, but you receive payments, it might just mean a reduced second-half payment.
If the monthly payments you received total more than you are eligible for, you’ll owe the IRS as part of your tax payment when you file your 2021 taxes.
If you don’t know for sure and you’d rather not risk having to pay it back, you can unenroll in the advance payments on the IRS Child Tax Credit Update Portal. If it turns out you qualify after all, you’ll receive a lump sum payment after you file your 2021 tax return. If you don’t qualify, you won’t receive a payment.
I don’t have full custody of the kids. Can I still claim the credit?
You can claim the child tax credit if the parent with custody agrees. If the noncustodial parent claims the Child Tax Credit, the custodial parent can’t and vice versa. The IRS has a special rule for divorced or separated parents (PDF) that explains who qualifies and how this works.
If you have split custody and claimed the Child Tax Credit in 2020, but you won’t claim it in 2021, the IRS might send you advance payments that you’d have to pay back. To prevent this problem, you can opt out of receiving the advance payments on the IRS Child Tax Credit Update Portal. Then you can file your taxes as usual in April, and the other parent can receive the credit as a lump sum.
I don’t have a home but I’m otherwise eligible. Can I still receive the payment?
Yes. People who are experiencing homelessness can claim the Child Tax Credit. The first step is to be sure you file your 2020 taxes with an alternate address — the address of a friend, relative, or trusted service provider like a shelter, drop-in day center or transitional housing program. If you can’t choose direct deposit, the IRS will send a check or debit card to this address.
The IRS has a number of FAQs, tools and fact sheets on its website. Here are a few resources:
- Advance Child Tax Credit Payments in 2021
- Advance Child Tax Credit Eligibility Assistant
- FAQ: General Information
- FAQ: Eligibility for Advance Child Tax Credit Payments and the 2021 Child Tax Credit
- FAQ: Calculation of the 2021 Child Tax Credit
- List of IRS 2021 Child Tax Credit FAQs
To see if you’re enrolled, unenroll in advance payments or update your credit union account or bank account information: Child Tax Credit Update Portal
Non-filers can sign up using this tool: Child Tax Credit Non-Filer Sign-Up Tool