Are you eligible for the revised child tax credit? 2021 income rules and more

The IRS will start sending monthly child tax credit payments in July for those who have qualifying kids. And if you meet the eligibility requirements, you could get up to $300 per month for each of your kids (depending on their age) as part of the American Rescue Plan. If you have kids 5 years old and younger, you could get up to $3,600 per child between 2021 and 2022 — and that includes babies born in 2021. For kids between the ages of 6 and 17, you could get up to $3,000 for each of them. (Calculate your total here.)

On March 28, President Joe Biden asked for the revised child tax credit payments to be extended to 2025. “The American Families Plan puts money directly into the pockets of millions of families,” he said about the child tax credit. We’ll explain the details for which dependents and families qualify for the child tax credit and how much money you can expect to receive once the benefit checks start to arrive (unless you opt out). Also, here’s how you can spend your money when it arrives.

Here’s some additional information on a potential fourth stimulus check, what to do if you haven’t received your third stimulus check, when it could come, how to track it and how to see what could be causing a delay in your stimulus payment. Also, you could get up to $50,000 back with one-time COVID credits. This story was recently updated.

Parents with children ages 5 and younger could see $3,600 total per kid over the next year

If your dependents are below the age of six, you can claim up to $3,600 per child as long as you meet the income requirements, 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. The parent filer would likely be able to update the IRS portal with their new dependent information to begin receiving the advance payments this year, said Garrett Watson, a senior policy analyst at Tax Foundation. Otherwise, parents can file a claim on their 2021 tax returns next year. However, everything is subject to change from now until the IRS provides more information and gets the portal up and running (the agency hasn’t set a specific timeline for that yet).

If you share custody of a qualified dependent, read this.

Child Tax Credit 2021 qualifications

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
Child age 5 and younger	Credit for $3,600 each if parent/guardian meets above requirements
Child age 6-17	Credit for $3,000 each if parent/guardian meets above requirements
Nonfiler	Will need to file a 2020 tax return to get the payment

Parents with children between ages 6 and 17 are eligible for up to $3,000 total per kid

If you have dependents who are aged 6 or older, you’ll qualify for up to $3,000 per kid over the next 12 months, assuming you meet the income requirements (refer to the chart above). This includes your dependents who are 17 years old — originally, 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 aged 19 to 24. 

Here’s what parents who share custody of a qualified dependent should know.

Single filers whose AGI is $75,000 or less can get the full amount

As long as your adjusted gross income (also known as AGI) is $75,000 or less, single taxpayer parents will qualify for the full child tax credit amount. After $75,000, the amount begins phasing out.

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.

Heads of household whose AGI is $112,500 can get the full amount

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 $112,500.

Married couples filing together who surpass an AGI of $150,000 may get a partial payment

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. 

Can you qualify for the revised child tax credit even if you don’t file a tax return?

Even if you don’t usually file taxes — you’re considered a nonfiler — you’ll need to file a return to qualify for the 2021 child tax credit. IRS Commissioner Charles Rettig said that payments will be automatic for those who file their 2020 tax returns by May 17, so if you don’t have your tax return submitted by this time, the IRS won’t know to send you a payment.

It’s also important to file a return in case you’ve gained new dependents since you last filed. That way you can get the full child tax credit amount you’re due.

Other 2021 child tax credit eligibility requirements you have to meet

• 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 the mixed-status households. 
• For married couples filing jointly, at least one spouse needs to have a Social Security number or an ITIN, Powell said. 
• 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 get the 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.

For more information, here’s everything you need to know about the 2021 child tax credit and when your payments could start arriving.