Information on the 2021 Child Tax Credit
What is the advance child tax credit?
The new advance child tax credit pays parents part of the tax credit they will receive at the end of the year in monthly installments. Parents will then report that they have received these payments — and will claim the other half of the credit — when filing their tax return in April 2022.
Part of the American Rescue Plan, which President Joe Biden signed in March, the new advance payments add to the child tax credit, which has existed in some form since 1997. The amount has increased over the years and will increase again with the new program on July 15. For now, the advance payments and increased amounts run through Dec. 15, 2021.
Who is eligible for the advance child tax credit?
Parents with at least one child under the age of 18 who meet the income requirements are eligible for the full credit.
To qualify for the full tax credit, filers must make less than $75,000 if filing alone, less than $150,000 if filing jointly as a married couple and less than $112,500 for “head of household” filers, such as unmarried single parents.
How do I receive the advance child tax credit payment?
You can receive the advance child tax credit payment either by direct deposit or by check.
If you have previously set up direct deposit with the IRS, then you will receive payments in that bank account. To check your eligibility and bank account information, you can visit the child tax credit update portal. If you enrolled to receive direct deposit, you should see your routing number and the last four digits of your account listed in the portal.
How is the advance child tax credit different from the child tax credit that exists right now?
This tax credit amount has increased, from $2,000 for all children to $3,600 for children under the age of 6 and $3,000 for children between the ages of 6 and 17.
How much will the payments be?
These payments will amount to half of the credit: $1,800 for younger children, and $1,500 for older children. Parents will claim the other half of the tax credit when filing taxes.
- $250 per older child for 6 months
- $300 per younger child for 6 months
When will I receive the payments?
For those who are eligible and have not opted out, the first payments will start July 15, 2021. Payments will continue monthly through December 2021.
If you want to opt out of the monthly payments and claim your full amount when you file your tax return, you can unenroll on the child tax credit update portal.
It is too late to opt out of the monthly payments for July, but families can opt out of the August payments by Aug. 2
Do I have to apply or sign up to receive the advance child tax credit?
No. You are automatically eligible for the child tax credit if you meet the requirements and if you filed your taxes in 2020.