New child tax credit update: Checks to arrive monthly — this is how much money you’ll get

You’ve been waiting and now we have an answer: The child tax credit payments are starting in July with “payments going out on a monthly basis,” IRS Commissioner Charles Rettig said Tuesday. If you qualify, the payments for the 2021 child tax credit will be sent each month through December — the rest of the money will arrive with your tax refund next year. The split payment can make calculating your child tax credit difficult, so we’ve created a calculator tool to help estimate how much money you can expect this year and next.

The new credit will range between $500 and $3,600 per child, depending on their age and shared custody. But if your income is higher than the cutoff or your child doesn’t meet all the requirements, you could get a smaller amount or even none at all. The more children you have, the more complicated calculating the payments becomes.

Our child tax credit calculator below will estimate how much money to expect in total. We’ll also explain what happens if your child reaches one of the age brackets by the end of 2021. While you’re here, this is what’s going on with the plus-up payments from the third stimulus checks. Also, here’s what we know about a fourth stimulus check, the situation with student loan forgiveness and extra savings you can get now for health care, like cheaper insurance. This story is frequently updated.

Calculate how much you’ll get with the 2021 child tax credit between this year and next

Child tax credit payments for 2021 allot up to $3,600 per child aged 5 and under, and $3,000 for kids between the ages of 6 and 17. You can get a $500 total payment for dependents who are 18 and for full-time college students between 19 and 24 years old. If your adjusted gross income, or AGI, is equal to or less than $75,000 as a single filer, $112,500 as a head of household or $150,000 filing jointly, you’ll receive the full amount. If your income is higher, your child tax credit payments will begin to phase out by $50 for every $1,000 of income over the threshold.

Just enter your details below to see how big your child tax credit checks will be. This calculator does not store your data. The results are based on our current knowledge of the law and should be treated as broad estimates only (the IRS will determine the final amount). We suggest consulting a financial planner for a more personalized estimate.

What if your child ages out of the cutoff by the end of this year?

If you have a 5-year-old child turning 6 by the end of the year, the total payment amount you could get for that child is $3,000. If you have a 17-year-old who turns 18 before the end of the year, you would receive $500 total for that dependent instead of $3,000. 

Here’s more information about qualifications your child must meet for you to get the advance payments. Also, if you have a dependent who is a full-time college student and turns 25 this year, you won’t receive any payment for them.

How are your taxes related to your 2021 child tax credit check total?

You need to file your 2020 taxes to get the credit if you’re a nonfiler. The IRS will automatically make the payments for those who have their taxes filed by the May 17 tax due date, the IRS’ Rettig said. So if you don’t have your tax return submitted by this time, the IRS won’t know to send you a payment. Also, if you plan to file a tax extension, you’ll likely be able to use the IRS portal, where you can update your information in case you’ve gained dependents since the last tax filing.

What if you start making more money later this year after child tax credit payments go out? 

If you start receiving advance payments this year for your 2020 taxes, but you get a new job making more money, you’ll likely be able to use an IRS CTC portal the agency will make available to update your information, according to Garrett Watson, a senior policy analyst at Tax Foundation. Doing so would lower the payment amounts you’d receive if your new income reaches the phaseout level (see above).

If you wait until 2022 to update your information when you file your taxes and you continue to receive the full amount based on your lower income, you would either have to return the excess credit on your 2021 tax return next spring, Watson says, or you’ll get a smaller amount on your 2021 refund.

So far, the IRS hasn’t released any further details about the portal, but Rettig said it will launch by July 1.

For more information, here’s when the 2021 child tax credits could be sent, who qualifies for the CTC, and eligibility requirements kids must meet. Also, if you share custody of a child, here’s everything you need to know about getting the payments.