The increased payments will put money in the bank accounts of millions of families this year.
Sarah Tew/CNET
The overwhelming majority of families with children will meet the requirements this year to receive money from the federal expansion of the child tax credit, which includes payments of up to $3,600 per kid between 2021 and 2022. Under new legislation, half of that credit will be broken into monthly payments from July to December of this year.
As is the case with things tax-related, the child tax credit rules can feel rather… elaborate. To receive the payments, your family needs to bring in less than a certain amount of income, and your dependents must meet certain requirements. And there’s more to know about babies born in 2021. On top of that, the advance monthly payments are optional, so parents can choose instead to receive the entire payout next year.
Meanwhile, the White House has launched an informational web page, and there’s an updated FAQ on the IRS website. We’ll explain the rules below. Here’s how to sign up for the IRS tools to manage your child tax credit checks and what you can expect next tax season if you receive the advance payments this year. We have updated this story recently.
What are the age brackets and income limits for the child tax credit?
The IRS looks at your family’s adjusted gross income, or AGI, the ages of your dependents and a handful of other things to determine if you meet the requirements for the child tax credit payments. Here’s a quick look at family income and dependent age limits.
Income and age limits for the child tax credit
| Family upper-income qualification limit | Dependent age qualifications |
|---|---|
| Single filer — AGI below $240,000 | Ages 5 and younger — up to $3,600 |
| Head of household — AGI below $240,000 | Ages 6 to 17 — up to $3,000 |
| Couple filing jointly — AGI below $440,000 | Age 18 — $500 |
| Ages 19 to 24, full-time college students — $500 |
Age qualifications for dependents
If your dependents are below the age of 6 on Dec. 31, 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. Later this year, parents will be able to update the IRS with their new dependent information in an online portal to receive the correct advance payments this year. Otherwise, parents can file a claim on their 2021 tax return next year.
If your dependents are age 6 or older on Dec. 31, you’ll qualify for up to $3,000 per child over the next year, assuming again that you meet the income requirements. This includes your dependents who are 17 years old on Dec. 31. 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.
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 |
Income requirements per household
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. Above $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.
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.
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 |
Watch this:
Child tax credit: Everything we know
4:17
Information for non-tax-filing families
Child tax credit payments will be automatic for those who filed their 2020 tax returns or claimed all their dependents on their 2019 tax return. If you don’t normally file taxes, because your income is too low or you don’t have a bank account or a permanent address, the IRS won’t know to send you a payment.
That means if you’re considered a nonfiler, you’ll need to act now to be able to receive the first round of payments this year. The IRS opened a new online portal for households that don’t traditionally file income taxes, so they can register their information. You’ll need a number of things on hand before starting the process, including a mailing address, email address, tax information on your dependents and bank account information.
Or, if you were planning on filing a 2019 or 2020 return but just haven’t gotten around to it yet, the IRS said to do so as soon as possible so your most recent information is on file for determining your payments.
IRS letter informs qualifying families
Earlier this month, the IRS started sending letters to 36 million families notifying them they may be eligible to receive monthly child tax credit payments, based on their federal income tax return from either 2019 or 2020. The IRS should also have details for eligible families that used an older IRS nonfilers tool to claim a stimulus check.
The IRS will soon send eligible families a second letter with a personalized estimate of their monthly payment.
Some eligible families may opt to receive the full $3,600 per child in one single installment next year.
Sarah Tew/CNET
More eligibility rules
- 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.