Are You Eligible for Advanced Child Tax Credit Payments in 2021?June 08, 2021
Attention families…you’ll want to read up on new information regarding when your child tax credit payments may arrive. We have the details here.
Parents…the IRS has released new details about the refundable child tax credit…are you up to speed? Important changes will help many families receive advance payments as soon as this summer. Here’s what you need to know.
What is the child tax credit (historically)?
If you have children under age 17 at the end of a calendar year, you are eligible for a tax credit of up to $2,000 per dependent child on your return.
What did the American Rescue Plan change?
Essentially, for 2021 only, the credit has been increased from $2,000 to $3,000 per child, or $3,600 for a child under age 6. The credit is fully refundable and available to qualifying children who haven’t reached 18 by the end of 2021. The increased amounts are reduced (phased out) for incomes over $150,000 for married taxpayers and $75,000 for single taxpayers. The new $500 partial credit for kids age 18-24 and dependents other than qualifying children remains nonrefundable.
Who’s eligible for advanced payments?
To qualify for advanced payments of the 2021 child tax credit, there are some qualifications you must meet:
- The child must be a U.S. citizen and be born before the end of 2021
- The child must have a Social Security Number
- The child can be adopted and still qualify for the credit
- The child must live with you for at least six months of the year (there are certain exceptions to this, including newborn children born later in 2021)
When are the checks being sent out?
The first child tax credit payments will begin July 15th and run through the end of December. The total of the advance payments will be up to 50 percent of the Child Tax Credit.
What actions do I need to take to get the credit?
Other than filing your 2020 tax return if you have not yet done so, there is no action needed from eligible taxpayers.
Can you decline receiving advance payments?
Yes, if you do not want to receive advance payments, you will have the opportunity to decline. Taxpayers will also have the opportunity to update information about changes in their income, filing status, or the number of qualifying children.
Our team will keep you updated as more information becomes available, including how to decline these payments or update your information. Questions? Contact us.