The Advance Child Tax Credit, part of the $1.9 trillion American Rescue Plan, starts on July 15th .
Eligible families will receive monthly payments of up to $300 per qualifying child from July
through the end of 2021 to help them bridge the financial gap caused by the COVID-19
pandemic. Advance Child Tax Credit payments are based on tax credits that would ordinarily be
received next year when income tax returns are filed for 2021.
Taxpayers who filed a tax return for 2019 or 2020 should receive their first Advance Child Tax
Credit payment on or around July 15th . Taxpayers who provided bank information with their filed
federal income tax return should see the payment direct deposited into their bank account. If the
IRS does not have bank information on file, the taxpayer will receive the payment in a check mailed to the address it has on file.
What about people whose income for 2019 and 2020 wasn’t high enough to have to file an income tax return? The IRS established an online Non-filer Sign-up tool to help them register for the monthly Advance Child Tax Credit payments by providing required information about
themselves, their qualifying children aged 18 and under, and their bank information so the IRS
can deposit the payments into their checking or savings account.
Eligible families need to know these facts about the Advance Child Tax Credit:
- The Child Tax Credit increase and Advance Payments are in effect for 2021 only, unless
extended by new law.
- The Child Tax Credit is increased from $2,000 to $3,000 per eligible child, for children
who are age 6 and older, and to $3,600 per eligible child for children under the age of 6.
- The age for qualifying children is increased from children under age 17 to children under
age 18, thereby increasing the number of eligible children.
- The Child Tax Credit is fully refundable, meaning that eligible taxpayers could receive a
tax refund that exceeds her or his tax federal withholding.
- Income limitations for the Child Tax Credit remain at $200,000 for single taxpayers and
$400,000 for married filing joint. The Additional Child Tax Credit is phased out by $50
for every $1,000 of modified adjusted gross income above the threshold.
- Any eligible Child Tax Credit not paid in advance from July to December 2021 will be
received after the taxpayer files her or his 2021 federal income tax return.
The Advance Child Tax Credit gives eligible families up to $300 a month per qualifying
child through the end of 2021 to help them bridge the financial gap caused by COVID-19.
Want to know more? The IRS recently posted FAQs at https://www.irs.gov/credits-