The 2021 Advance Child Tax Credit will be issued beginning Thursday, July 15. Eligible recipients must have filed a 2019 or 2020 tax return.
The Advance Child Tax Credit is part of early payments from the Department of the Treasury Internal Revenue Service and the American Rescue Plan signed into law in March. According to the IRS, eligible families may receive 50% of the estimated amount of the Child Tax Credit claimed on the 2021 tax return during the 2022 tax filing season.
J. Terre Lee of the Birmingham Internal Revenue Service said, “Eligible families can receive up to $300 per month per child under age six and up to $250 per month for children ages six and above,”
He urges families who have not filed their tax returns to do so.
“These payments can truly make a difference in the lives of families,” he said. “Even those with no earned income or who don’t owe any federal income taxes can still receive the credit, if eligible.”
However, he said to receive these advance payments recipients must have filed their tax returns.
Per the IRS, the American Rescue Plan, signed into law in March, made changes to the Child Tax Credit (CTC) for most taxpayers in 2021.
The credit amounts increased for many taxpayers and the credit is fully refundable, which means taxpayers can benefit from the credit even if they don’t owe any income taxes.
“The Treasury Department and the IRS publicly committed to carrying out a sweeping public awareness campaign to reach all Americans who may be eligible for this financial assistance,” said Lee.
Per the IRS, the credit also includes qualifying children who turn age 17 in 2021. The advance CTC payments will be half of the estimated CTC with a maximum annual amount of $3,000 per qualifying child between the ages of six and 17 and $3,600 per qualifying child under age six at the end of 2021.
To qualify for advance Child Tax Credit payments, you — and your spouse, if you filed a joint return — must have:
• Filed a 2019 or 2020 tax return and claimed the Child Tax Credit on the return; or
• Given us your information in 2020 to receive the Economic Impact Payment using the Non-Filers: Enter Payment Info Here tool; and
• A main home in the United States for more than half the year (the 50 states and the District of Columbia) or file a joint return with a spouse who has a main home in the United States for more than half the year; and
• A qualifying child who is under age 18 at the end of 2021 and who has a valid Social Security number; and
• Made less than certain income limits.
The IRS determined eligibility for taxpayers who filed their 2020 tax return via their provided information. Qualifying recipients are automatically enrolled for advance payments and do not need to take any additional action to receive payments.
As stated by the IRS, the Advance Child Tax Credit payments are not considered income and will not affect your access to government benefits including, SSI, SNAP, TANF or WIC.
Even though the July deadline to opt-out for qualifying families has passed, recipients can unenroll for advance monthly payments via the Child Tax Credit UPdate Portal found on the IRS website at www.irs.gov/credits-deductions.
Those who chose to opt-out of the advance payment program this year will claim the full amount when filing their 2022 tax return.
The maximum credit is available to taxpayers with a modified Adjusted Gross Income of:
• $75,000 or less for single taxpayers
• $112,500 or less for the head of household
• $150,000 or less for married couples filing a joint return and qualifying widow(er)s
• The maximum credit phases out for higher-income taxpayers.
For additional information, visit www.irs.gov/childtaxcredit2021.