2021 Child Tax Credit Advanced Payments

More money is coming to more families — and soon.

That’s the main takeaway of the changes implemented to the Child Tax Credit (CTC) this year. As part of the March 2021 stimulus bill, the value of the credit as well as the age limit have been increased. The CTC is now fully refundable, which means you can receive the credit even if you don’t owe the IRS.

New 2021 Child Tax Credit and advance payment details

Child Tax CreditsChild Tax Credit amounts will be different for each family

  1.  Your amount changes based on the age of your children. The payment for children:
    •    Ages five and younger is up to $3,600 in total (up to $300 in advance monthly)
    •    Ages six to 17 is up to $3,000 in total (up to $250 in advance monthly)
  2.  Your amount changes based on your income. You’re eligible for the full amount if your Modified Adjusted Gross Income is under:
    •    $150,000 for Married Filing Jointly or Qualified Widow(er)s
    •    $112,500 for head of household filers, and
    •    $75,000 for single and Married Filing Separate
    •    A portion of your amount is reduced (“phases out”) by $50 for every $1,000 over the limits listed above.

Advance payments for the Child Tax Credit start July 15

Families can expect the first payments to be received by direct deposit on or around July 15, 2021. Then, they’ll continue monthly on the 15th of each month unless the 15th falls on a weekend or holiday. For those receiving checks, they’ll be mailed around the same time.

Most people don’t have to do anything to get the advance payments

Nothing is required by the IRS to get the payments for most people – they’ll be automatic if you’ve filed a 2020 or 2019 tax return. If you have updates to your personal information or want to opt out, you’ll need to take action.

Your last return is also the basis for your CTC calculation

The IRS will use your 2020 (or 2019) tax return details — meaning your income and dependent information — to estimate your amount for the advanced Child Tax Credit.

You can opt out of payments, if you prefer, starting when the portal opens in June

If you prefer to receive your full Child Tax Credit when you file in 2022, you can use the IRS portal to opt out. You can opt out at any time before Dec. 15 — even if you’ve already received earlier payments.

There are two reasons you may wish to opt out:

  1. You prefer to receive the full CTC when you file your 2021 tax return, or
  2. Your income or family situation has changed since last year, and you may be liable for repaying some or all of the advanced payments.

Please contact us if you have any questions, concerns, or need advisement during this unprecedented time.