You can opt out of advance child tax credit payments to get one lump sum during tax time.
Sarah Tew/CNET
The facts and figures for the enhanced child tax credit can be stressful for parents. But this year’s credit could also be a pleasant surprise for families that weren’t expecting extra cash in their bank accounts this summer. Not only is the amount of the credit higher in 2021 but, for the first time, qualifying families get half of the total upfront on a recurring monthly basis to help with everyday expenses. The other half comes in one payout during tax season next year.
The first of the six monthly payments went out on July 15, and the next one is scheduled for Aug. 13. Parents can collect up to $300 each month for each child under age 6, and up to $250 a month for each kid ages 6 to 17 unless they opt out of the advance payment program, which we’ll explain below. To estimate the total — which depends on income and children ages — use CNET’s calculator. If you experienced any problems with your payment, we can explain what might be happening with your money.
Keep reading for answers to common questions about the child tax credit. Some parents want to know how the payments will affect their taxes, especially since the IRS bases this year’s amounts on old tax information. Fortunately, there are ways to anticipate pitfalls by managing your household details through the online IRS portals. We can also suggest how parents might want to use the money and tell you how to claim up to $16,000 more for child care costs. This story is updated frequently.
When will my family get the next child tax credit payment?
You won’t get all of the child tax credit money this year. You’ll get half of the money in monthly payments, and the rest in 2022 when you file your taxes, unless you tell the IRS you want to unenroll from the advance monthly payments to get one lump sum next year. The next check will be disbursed on Friday, Aug. 13.
So in other words, your largest payment arrives next year — up to $1,800 per child. Until then, you get six smaller payments total this year to start using right away. The idea is to bring you money sooner to meet expenses like rent, food and day care, which is why the checks are “advance payments.”
Child tax credit payment schedule
Monthly
Maximum payment per child 5 and younger
Maximum payment per child; 6 to 17
July 15: First 2021 check
$300
$250
Aug. 13
$300
$250
Sept. 15
$300
$250
Oct. 15
$300
$250
Nov. 15
$300
$250
Dec. 15: Last 2021 check
$300
$250
April 2022: Second half of payment
$1,800
$1,500
What if I haven’t received my child tax credit money yet?
One thing to keep in mind is that the IRS is targeting the payment dates (see above). If you have direct deposit set up with the IRS, you might see a pending payment before the actual closing date. That means you might not be able to access the money right away, but that it’s in process.
It could take longer for your payment to arrive if you’re receiving the check by mail. If enough time has passed and you’re concerned there may be a problem, you can use the IRS Update Portal to correct your direct deposit information. You can also file an IRS payment trace if you’re worried. Check here for more information about missing payments.
Can I opt out of the rest of the advance monthly payments?
Advance payments are optional, and even though the majority of US families are eligible many still don’t qualify. If you’re not sure that you qualify you may prefer to opt out to avoid repaying the IRS. The next opt-out deadline is Monday, Aug. 2, but you can use the IRS Child Tax Credit Update Portal online anytime between now and December to unenroll. You may want to unenroll if you don’t meet income or other eligibility requirements.
To stop advance checks, the IRS says you must unenroll three days before the first Thursday of the following month. See the chart below for deadlines. Once you unenroll in this year’s advance payments, you can’t yet reenroll, though the IRS says it will make that option available later. Also note that for couples who are married and filing jointly, each parent must unenroll separately. It is too late to opt out of the July payment, but you can unenroll for the rest of the monthly payments.
Child tax credit payment unenrollment dates
Payment month
Unenrollment deadline
Payment date
July
June 28
July 15
August
Aug. 2
Aug. 13
September
Aug. 30
Sept. 15
October
Oct. 4
Oct. 15
November
Nov. 1
Nov. 15
December
Nov. 29
Dec. 15
How do the IRS child tax credit portals help me?
In June, the IRS opened more online tools and portals. The first portal is for people not normally required to file an income tax return, including low-income families. And the Child Tax Credit Eligibility Assistant tool — available in English and now in Spanish — helps families quickly determine whether they qualify.
The Child Tax Credit Update Portal currently lets families see their eligibility, manage their payments and unenroll from the advance monthly payments. Parents can also update their direct deposit information using the portal. In the coming months, it will allow families to update other information if their circumstances changed — for example, if a new child has arrived or will arrive in 2021 and isn’t reflected on your 2020 tax return. You’ll also be able to update your mailing address, marital status, income or dependents to have the most up-to-date eligibility information.
This handy IRS PDF also describes what the portals do.
Is my family’s income too high to qualify for payments this year?
Income limits determine how much you will receive and if you even qualify, though there is no limit on the number of children you can receive credit for as long as you’re eligible.
Single filers earning less than $75,000 per year, heads of household earning less than $112,500 per year and married couples earning less than $150,000 a year will be eligible for the full amount.
The amount you’ll get will then phase out for higher incomes. Your child tax credit payments will phase out by $50 for every $1,000 of income over those threshold amounts, according to Joanna Powell, managing director and certified financial planner at CBIZ. In other words, your family could still receive some money above those income limits, but it won’t be for the maximum payment.
How much can my family get for each of our dependents?
How the child tax credit payments will be divided between 2021 and 2022 might be confusing. For each qualifying child age 5 and younger, up to $1,800 (half the total) will come in six $300 monthly payments this year. For each kid between the ages of 6 and 17, up to $1,500 will come as $250 monthly payments six times this year.
The IRS bases your child’s eligibility on their age on Dec. 31, 2021, so a 5-year-old turning 6 in 2021 will qualify for a maximum of $250 per month. For both age groups, the rest of the payment will come with your 2021 tax refund when you claim the remainder of the credit in 2022.
If you have a dependent who is 18 years old, they can qualify for $500 each. Dependents between the ages of 19 and 24 may qualify as well, but they must be enrolled in college full time. Here’s more on the financial details for qualified dependents.
2021 child tax credit maximum payments
Ages 5 and younger
Up to $3,600, with half as $300 advance monthly payments
Ages 6 to 17
Up to $3,000, with half as $250 advance monthly payments
Age 18
$500 one-time check
Ages 19 and 24, full-time college students
$500 one-time check
Can my new baby qualify for payments this year?
If you have a baby in 2021, your newborn will count toward the child tax credit payment of $3,600. Children who are adopted can also qualify if they’re US citizens. You’ll be able to update the IRS on a new dependent once that aspect of the Update Portal is available.
If I don’t file taxes, can I still get child tax credit checks?
Payments will be automatic for those who filed their 2020 tax returns by the May 17 deadline (or those who claimed all dependents on a 2019 tax return). Parents who didn’t file taxes should use the new IRS tool, called the “Non-filer Sign-up tool,” to get their money, even if you’re not usually required to file. This will let the IRS know your income level and how many dependents are in your household who count toward the child tax credit benefits.
You could also file a tax return to get the full monthly child tax credit payment you’re owed.
What should I do if I share custody of my dependents?
For the first two stimulus checks, some parents who shared custody of a child but weren’t married to each other were entitled to each claim money for the same child. That was only if they alternated years for claiming the dependent — in other words, if one parent claimed the child on their taxes in odd years and the other claimed the child on their taxes in even years.
This is no longer allowed for the third check, and we’re told it won’t work that way for the child tax credit payments either. Here’s what we know so far about child tax credit and shared custody situations.
If the child switches homes this year, the parents will need to agree on who will claim the child on their taxes this year. The parent that claims the child and receives the child tax credit payments will need to fill out Form 8332 and include it with the tax return. If you don’t qualify or want to get the money in one lump sum, you can also opt out of early payments. Remember, if you’re not eligible but receive the money, you may have to pay the IRS back during tax time.
Parents of babies born in 2021 are eligible for advance child tax credit payments.
Sarah Tew/CNET
If the IRS overpays me, will I have to pay the credit back?
Since the IRS uses your 2019 or 2020 tax return, your family may not qualify for the child tax credit payment when you file your 2021 tax return in 2022. In this case, you may have to repay the IRS some or all of the credit. The child tax credit rules aren’t as flexible as the stimulus check rules regarding overpayment. One example of when this would happen is if you and the other parent of your child (who is not your spouse) were both paid for the child tax credit for the same dependent.
To avoid this tax inconvenience, make sure all your information is updated before the payments start arriving. The Update Portal will let you make adjustments in the coming months to verify your new income and marital status.
How will the advance checks affect my taxes?
If you’re eligible for advance payments and choose to get the extra cash this year, you’ll receive the second half of your total on your taxes next year. You’ll need the total amount of child tax credit money received in 2021 to compare it with how much you can claim. The IRS will send a letter with your personalized estimate; you’ll need it for your 2021 tax return. You may have to repay the IRS if you got more than you were supposed to.
On the other hand, if you opted out of early child tax credit payments, you’ll get the money in one lump sum. Here’s what to know about how the payments impact your tax refund next year.