Almost 90% of families with children in the US will receive the benefit from the IRS automatically.
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On July 15, your household could receive the first monthly installment of $250 or $300 for each dependent with the new child tax benefit. Depending on the age of your children (check their eligibility), that would amount to $3,000 or $3,600 per child over 2021 and 2022. The amount of the child tax credit was increased when the American Rescue Plan was signed into law in March.
Before July 1, the IRS will open two web portals to allow you to choose if you want to defer receiving half the total through advance monthly checks, which would mean getting one payment in 2022 for the full amount instead. The portals will also you to update your personal details if your income or number of dependents has changed, essential details for receiving the right amount for the credit.
We’ll explain what to do if you normally don’t file a tax return or if you share child custody, and we have some suggestions for ways to use your child tax credit money. You might also want to know how to claim up to $16,000 in child care expenses and how you should expect to receive your payments. For other money matters, here’s what to do if your stimulus check or plus-up payment hasn’t arrived. This story has been updated.
What is the timeline for the child tax credit payments?
The first child tax credit check will arrive July 15 and is automatic for those households that qualify. The first six payments totaling half the credit will arrive monthly, targeting the same day of the month — though you may not receive the payment on the exact same day every month, especially if you get a paper check instead of a direct deposit payment.
If the child tax credit payment date falls on a holiday or weekend — for example, Aug. 15 is a Sunday — it’s likely the payment will go out the following Monday. The checks will end in December, with the remainder of the credit coming next year after taxes. Here’s a rough schedule:
Timeline for the child tax credit payments
| Monthly | Maximum payment per child 5 and younger | Maximum payment per child; 6 to 17 |
|---|---|---|
| July 15: First 2021 check | $300 | $250 |
| Aug. 16 | $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 you still haven’t filed your last tax return?
Payments will be automatic for those who filed their 2020 tax returns by the May 17 deadline, so nonfilers will need to file a simple one-time tax return to get their money, even if they’re not usually required to file. This will let the IRS know your income and how many dependents are in your household who count toward the child tax credit benefits. Those taxpayers who did meet the deadline shouldn’t file an amended return related to the new legislation.
If you don’t file a tax return, you may not get the full monthly child tax credit payment you’re owed, at least not right away. The IRS said you will be able to update your income and dependent status so the agency is using your most recent info when calculating payments. One of the upcoming IRS portals will be designed for people who don’t usually file taxes.
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Child tax credit: Everything we know
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When will the IRS open its online child tax credit portals?
The IRS will launch two online portals by July 1. One portal is for people not normally required to file an income tax return, which will allow nonfilers to provide their information ro receive payments. The second portal will allow families to update their information if their circumstances have changed, for example, if a new child arrives in 2021 who isn’t reflected on your 2020 tax return.
The portals can also allow families to opt out of the monthly payments if they prefer to receive one big payout when they file taxes in 2022.
What about age qualifications and thresholds?
How the 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. For both age groups, the rest of the payment will come with your 2021 tax refund when you claim the remainder of the tax credit in 2022. Here’s how to calculate your family’s total child tax credit amount, including a monthly breakdown.
If your dependents are 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 breakdown for qualified dependents.
2021 child tax credit maximum payments
| Ages 5 and younger | Up to $3,600, with half as $300 monthly payments |
|---|---|
| Ages 6 to 17 | Up to $3,000, with half as $250 monthly payments |
| Age 18 | $500 one-time check |
| Ages 19 and 24, full-time college students | $500 one-time check |
How is the 2021 child tax credit different from last year?
The first thing to know is you won’t get your child tax credit payments all at once in 2021. The credit part means the amount you owe on your 2021 taxes (which you file in 2022) will be reduced by the “credit” you gain from your eligible dependents. That could either reduce the amount you owe the IRS or else increase your tax refund. The idea is to bring you money sooner, which is why the checks will start coming in 2021 as “advance payments.”
This logic also explains why your 2021 child tax credit is split into two parts. The first half in 2021 will come as advance monthly installments you can start using right away. The second half will apply to your 2021 taxes next year.
The larger child tax credit can help families that have seen more financial hardship due to the pandemic.
Sarah Tew/CNET
What if you have a new baby or adopt a child 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.
What about parents who have shared custody?
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 the child tax credit and shared custody situations.
How can you defer the monthly payments and get one payout instead?
You aren’t obligated to receive monthly child tax credit payments this year. Instead, you can choose to get one payment in 2022 (the upcoming IRS portals will allow you to do so). You may want to opt out if you’d rather have one large payment for a projected expense next year, or if you’re concerned the IRS might overpay you this year and you don’t want to be saddled later with an outstanding debt.
What are the income limits for the 2021 child tax credit?
Income limits do 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. The amount you’ll get will phase out for people with higher incomes: singles earning more than $75,000 per year, heads of household earning more than $112,500 per year and married couples earning more than $150,000 a year. Your child tax credit payments will begin to 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.
The expanded child tax credit is expected to make a big impact for eligible parents.
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Will the child tax credit checks come by mail or direct deposit?
The way your child tax credit money arrives could very well depend on how you receive your stimulus check money. Most people will receive child tax payments by direct deposit, but the IRS will also send paper checks and funds on debit cards.
For stimulus checks, people who received Social Security benefits like SSI or SSDI got $1,400 payments on a Direct Express card. Veterans who don’t normally pay taxes might also have a different delivery method. We’ll update this when we have more information about the kind of debit cards you may receive.
What if the IRS sends a higher amount than you’re eligible for?
You will have to return any overpaid amount to the IRS. The child tax credit rules aren’t as flexible as the stimulus check rules. When you file your 2021 tax return (in 2022), if your tax situation isn’t what the IRS has in its system and you weren’t entitled to as much as you received, you’ll have to give the overpayment back. One example of this happening is if you and the other parent of your child (who is not your spouse) are 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 future portal will allow you to make adjustments.
What comes after the last payment this year?
The final advance payment of the child tax credit is scheduled to go out by Dec. 31, with the rest coming in 2022 with tax season. But President Joe Biden stated that the higher payments may last until at least 2025. He presented his American Families Plan proposal to extend the payments, stating in an April 28 speech: “Together, let’s extend the Child Tax Credit at least through the end of 2025.” It’s up to Congress to approve his request.
For more information, here are the top things to know about the $3,600 child tax credit. Plus, here’s how to track your tax refund and how to track your stimulus check.