Key things to know about the monthly Advance Child Tax Credit
(Gray News) - Nearly 40 million families are set to receive monthly child tax credit payments beginning July 15, as part of President Joe Biden’s $1.9 trillion coronavirus relief package.
The expanded credit was signed into law in March, increasing the potential maximum payout in 2021 to $3,600 for children under the age of 6 and $3,000 for children between the ages of 6 and 17.
The IRS will determine eligibility based on 2019 and 2020 tax years, but people can also update their status online.
Eligible families who don’t normally file tax returns can click here to register for the monthly Advance Child Tax Credit payments.
This tool provides an easy way for eligible people who don’t make enough money to have an income tax return-filing obligation to provide the IRS the basic information needed.
Qualified families will receive a monthly payment of up to $300 for each child under the age of 6 and up to $250 for children between the ages of 6 and 17.
Who is eligible for Advance Child Tax Credit payments?
- Anyone with a qualifying child who is properly claimed as the taxpayer’s dependent.
- You – or your spouse, if married filing a joint return – must have your main home in the United States for more than half the year.
What do I need to do to receive the payments?
- Generally, nothing. If you are eligible to receive advance child tax credit payments based on your 2020 tax return or 2019 tax return, you should receive the payments automatically via direct deposit or in the mail.
- If you did not file a 2020 or 2019 tax return, use the non-filer tool online.
Who will receive the maximum credit?
- Married couples with children who file taxes jointly and have an adjusted gross income of less than $150,000.
- Taxpayers filing individually with an adjusted gross income of less than $75,000.
- The tax credit phases out for taxpayers who make more money.
- Taxpayers who earn more than $95,000 individually but less than $200,000 annually, or $170,000 but less than $400,000 for married couples filing jointly, will only be eligible for the regular tax credit of $2,000 per child under 17.
How and when will future payments be sent?
- Payments will be made on the 15th of each month unless it falls on a weekend or holiday, at which point it will be paid on the closest business day.
- Right now, the monthly payments are only scheduled for the end of 2021, with the remaining balance to be issued when filing your 2021 tax return.
- Generally, the payments will be distributed via direct deposit, but the IRS will also send paper checks to families who do not have direct deposits on their tax returns.
What if I don’t want the monthly payments?
- If you prefer to receive the Child Tax Credit payment in one lump sum with your tax return, you may opt-out of monthly payments.
- Some may choose to do this to use the money against potential money owed or would simply rather have a larger lump sum for spending.
- Click here to unenroll or to stop getting advance payments
How can I update the IRS on changes to income or kids?
The IRS is working to launch a tool online later this summer to make changes to your information. This includes changes to your dependents, marital status and income.
IRS quick links:
- Manage Payments - check to see if you’re enrolled; unenroll; or provide bank account information for monthly payments.
- Non-filers: Submit your information - provide basic information if you aren’t required to file a tax return.
- Check eligibility - check to see if you qualify for advance payments.
The IRS is reminding everyone to be on the lookout for potential scam artists trying to use the child tax credit as a way to steal personal information and money.
The IRS will never contact you by email, text message or social media to request personal or financial information.
For more details about the Advance Child Tax Credit, visit IRS.gov/childtaxcredit2021, or read FAQs on the 2021 child tax credit and Advance Child Tax Credit payments.
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