The new child tax credit program will start on Thursday, July 15.
Sarah Tew/CNET
We’re less than a week away from the start of 2021 child tax credit payments. Over 90% of US families are eligible, but your family’s income or kid’s age can disqualify you for the advance monthly payments. How do you know if you qualify? And if you do, how much do you get?
Child tax credit requirements have changed since last year, as has the maximum amount. The requirements can seem complicated, but we’re here to break it down for you. In order to get advance monthly child tax credit payments, parents must meet certain income requirements, and dependents must meet age requirements to get a certain amount. Adopted children and babies born in 2021 may qualify, too. But if families qualify for the extra cash, the monthly payments are optional, so parents can choose instead to receive one lump sum when they file their taxes next year.
Meanwhile, the White House has launched an informational web page, and there’s an updated FAQ on the IRS website to give you more child tax credit information. We’ll break it all down for you. And here’s how to sign up for the IRS tools to manage your child tax credit checks when they come and what you can expect next tax season if you receive the advance payments this year. We have updated this story recently.
What are the eligibility qualifications for the child tax credit?
The IRS looks at your family’s adjusted gross income, or AGI, the ages of your dependents and a handful of other things to determine if you meet the requirements for the child tax credit payments. Here’s a quick look at family income and dependent age limits.
Income and age limits for the child tax credit
Family upper-income qualification limit
Dependent age qualifications
Single filer — AGI below $240,000
Ages 5 and younger — up to $3,600
Head of household — AGI below $240,000
Ages 6 to 17 — up to $3,000
Couple filing jointly — AGI below $440,000
Age 18 — $500
Ages 19 to 24, full-time college students — $500
What are the child tax credit age requirements for dependents?
If your dependents are below the age of 6 on Dec. 31, you can claim up to $3,600 per child as long as you meet the income requirements, which are listed below. That’s $1,600 more than the $2,000 that parents were able to claim on their 2020 tax returns.
This includes newborns, even if they’re born later in 2021. Later this year, parents will be able to update the IRS with their new dependent information in an online portal to receive the correct advance payments this year. Otherwise, parents can file a claim on their 2021 tax return next year.
If your dependents are age 6 or older on Dec. 31, you’ll qualify for up to $3,000 per child over the next year, assuming again that you meet the income requirements. This includes your dependents who are 17 years old on Dec. 31. In prior years, parents could only claim up to $2,000 for each dependent age 16 and younger.
You can also get money for your older kids, although it’s not nearly as much. You can claim up to $500 for an 18-year-old, as well as for full-time college students ages 19 to 24.
2021 child tax credit age brackets
Ages 5 and younger
Up to $3,600 each child, with half of credit as $300 monthly payments
Ages 6 to 17
Up to $3,000 each child, with half credit as $250 monthly payments
Age 18
$500 one-time check in 2022
Ages 19 to 24, full-time college students
$500 one-time check in 2022
What are the income requirements per family?
As long as your adjusted gross income, or AGI, is $75,000 or less, single taxpayer parents will qualify for the full child tax credit amount. Above $75,000, the amount begins phasing out. At $240,000, single filers phase out of the tax credit entirely.
If you’re married and filing jointly with your spouse, your AGI needs to be $150,000 or less to qualify for the full child tax credit amount. At $440,000, couples will phase out of the tax credit entirely.
The credit phases out by $50 for every $1,000 of income over the threshold amounts for all filers, according to Joanna Powell, managing director at CBIZ.
As a head of household, your AGI will need to be $112,500 or less to qualify for the full child tax credit amount. The amount you could get begins phasing out if your income is over that amount, and by $240,000 you phase out of the tax credit.
2021 child tax credit income limits
Who qualifies
What the law says
Single filer
An AGI of $75,000 or less to qualify for the full amount
Head of household
An AGI of $112,500 or less to qualify for the full amount
Couple filing jointly
An AGI of $150,000 or less to qualify for the full amount
Nonfiler
Will need to file a 2020 tax return to get the payment
Is the child tax credit IRS letter only for eligible families?
Earlier this month, the IRS started sending letters to 36 million families notifying them they may be eligible to receive monthly child tax credit payments, based on their federal income tax return from either 2019 or 2020. The IRS should also have details for eligible families that used an older IRS nonfilers tool to claim a stimulus check.
The IRS will soon send eligible families a second letter with a personalized estimate of their monthly payment.
Can non-tax-filing families get child tax credit payments?
The IRS is hosting special events in 12 cities this weekend, July 9-10, for families who are considered nonfilers to register for child tax credit payments. Child tax credit payments will be automatic for those who filed their 2020 tax returns or claimed all their dependents on their 2019 tax return. If you don’t normally file taxes, because your income is too low or you don’t have a bank account or a permanent address, the IRS won’t know to send you a payment.
That means if you’re considered a nonfiler, you’ll need to act now to be able to receive the first round of payments this year. The IRS opened a new online portal for households that don’t traditionally file income taxes, so they can register their information. You’ll need a number of things on hand before starting the process, including a mailing address, email address, tax information on your dependents and bank account information.
Or, if you were planning on filing a 2019 or 2020 return but just haven’t gotten around to it yet, the IRS said to do so as soon as possible so your most recent information is on file for determining your payments.
The IRS is hosting events in 12 cities this weekend to help nonfiling parents register for advance child tax credit payments.
Sarah Tew/CNET
More child tax credit eligibility requirements
The child you’re claiming must live with you for at least six months out of the year.You and your child must be US citizens, unlike mixed-status households. For married couples filing jointly, at least one spouse needs to have a Social Security number or an ITIN. The child must also have a Social Security number — a child with only an ATIN won’t qualify. (This includes adopted children.)Parents who share custody of a child cannot both receive the tax credit.
Here’s what else to know about the 2021 child tax credit.
Important: The results here are based on our current knowledge of the law, but should be treated as broad estimates only. Consult a financial planner for a more personalized estimate.