Does your family qualify for the $3,600 child tax credit? Income rules and age requirements

Mark July 15 on your calendar. That’s when qualifying families will automatically receive their first advance child tax credit payment, with monthly payments for half the total amount continuing throughout 2021. However, just like anything tax-related, the child tax credit rules are somewhat complicated. We can help. 

There are income thresholds to get the payments, and your dependents have to meet certain age requirements. The newly increased 2021 payments are for up to $300 a month per kid, or $3,600 total per kid over the course of this year and next. That includes babies born in 2021. Another key thing to know: the advance monthly payments are optional, so parents can choose instead to receive the entire lump sum when they file taxes in 2022.

According to a White House fact sheet, the American Families Plan might extend the new child tax credit in the future. We’ll keep you informed. Here’s what’s happening with a potential fourth stimulus check, what to do if you haven’t received your third stimulus check, when it could come and how to track it. This story was updated. 

Families get $3,600 total for each child under age 6

If your dependents are below the age of 6, you can claim up to $3,600 per child as long as you meet the income requirements, which are 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. Before next month, parents will be able to update the IRS with their new dependent information in an online portal in order to begin receiving the advance payments this year. Otherwise, parents can file a claim on their 2021 tax return next year.

2021 Child Tax Credit Age Brackets

Ages 5 and younger	Up to $3,600 each child, with half of credit as $300 monthly payments
Ages 6 to 17	Up to $3,000 each child, with half credit as $250 monthly payments
Age 18	$500 one-time check in 2022
Ages 19 to 24, full-time college students	$500 one-time check in 2022

Families get $3,000 total for each kid between ages 6 and 17

If your dependents are age 6 or older, you’ll qualify for up to $3,000 per kid over the next year, assuming you meet the income requirements. This includes your dependents who are 17 years old. In prior years, 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 ages 19 to 24. 

Individuals who make $75,000 or less (or couples who make $150,000 or less) will get the full amount

As long as your adjusted gross income, or 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. At $240,000, single filers phase out of the tax credit entirely.

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. At $440,000, couples will phase out of the tax credit entirely.

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. 

2021 Child Tax Credit Income Limits

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
Nonfiler	Will need to file a 2020 tax return to get the payment

Heads of household who make $112,500 or less are eligible for the total 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 that amount, and by $240,000 you phase out of the tax credit.

People who don’t typically file their taxes may qualify, but…

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. Payments will be automatic for those who filed their 2020 tax returns by May 17, so if you didn’t have your tax return submitted by this time, the IRS won’t know to send you a payment.

By July 1, the IRS will open two separate online portals. One of the portals will be crucial for households that don’t traditionally file income taxes so they can register their information. Households that have gained new dependents since filing taxes should update their information in the portal to make sure they get the amount they’re due. 

More eligibility rules for receiving the new child tax credit checks

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

Here’s what else to know about the 2021 child 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.