IRS to start cutting Child Tax Credit checks TODAY
Important changes to the Child Tax Credit will help families get advance payments.
The IRS will pay half the total credit amount in advance monthly payments starting July 15.
The IRS is making important changes to the Child Tax Credit this summer to assist families in getting advance payments of the credit. The advance payments will be made in half the total credit amount and will be applied monthly to eligible families beginning on July 15, 2021.
When families file their 2021 income tax return, they will claim the other half of the total.
Child Tax Credit
Special rules for 2021 include an increase of the credit from $2,000 to $3,000 per eligible child under of 18 ($3,600 per child under the age of 6). The fully refundable credit, with 50% of the credit issued as advance periodic payments starting in July, will be reconciled on the 2021 tax return.
For 2021, the increased credit amount begins phased-out at $75,000. Once the increased credit amount is reduced, the credit plateaus at $2,000 and the phaseout begins at $200,000.
To qualify for advance Child Tax Credit Payments, you (and your spouse if you file a joint return) must have the following:
- Filed a 2019 or 2020 tax return and claimed the Child Tax Credit or have given the IRS information in 2020 to receive the Economic Impact Payment.
- A main home in the US for more than half a year or file a joint return with a spouse who has a main home in the US.
- A qualifying child with a valid social security number. This child must be under the age of 18 at the end of 2021.
- Made less than certain income limits.
If you meet all of the above requirements, you will be automatically enrolled into the advance payment system by the IRS. You do not need to take any action to enroll.
Useful Advance Child Tax Credit Payment Online Tools
The IRS has launched new online tools to help families manage and monitor their advance monthly Child Tax Credit payments.
The new online tools include:
Child Tax Credit Eligibility Assistant - This tool assists families by prompting them to answer questions to determine whether they qualify for the advance credit or not.
Child Tax Credit Update Portal - This tool helps families verify their eligibility for their payments as well as provides families with the option to unenroll or opt out from receiving monthly payments.
Child Tax Credit Non-filer Sign-up Tool - This tool allows individuals register for payments who do not normally file an income tax return.
Unenrolling from the Advance Child Tax Credit Payments
If you prefer to wait until the end fo the year to receive the Child Tax Credit, you may opt out of receiving the advance payments. To unenroll for the advance payments, utilize the Child Tax Credit Update Portal and gain access to the feature.
Visit the IRS website to access the portals and review additional information on the Advance Child Tax Credit Payments.
*This blog post features information sourced by the NATP as well as the IRS.