Parents of dependent children in the U.S. are getting a bigger boost from the federal government than usual this year. The American Rescue Plan passed earlier in 2021. It not only provided the third round of economic stimulus payments but also increased the maximum amount that families can receive in child tax credits for 2021.
The new tax legislation raised the dollar amount for 2021 child tax credits and also changed the structure of how the credit will be disbursed to families. Half of the child tax credit will be offered in monthly payments during the second half of 2021, while the rest will be among other tax credits that you can claim on your 2021 tax returns.
When will families receive the first child tax credit payment?
Qualifying families will start receiving the child tax credit payments on July 15. Subsequent payments will arrive every month on the 15th or the nearest business day to the 15th. Each child under age 6 will result in $300 monthly payments, while children aged 6–17 will qualify you for $250 monthly payments.
These are the dates you can expect your monthly child tax credit payments:
- Dec. 15
Soon, you will be able to update the IRS on any changes in the number of qualifying children or income through an online tool.
It’s possible to opt out of the advance tax credit payments. The IRS says an online portal to opt out is coming soon. Those who prefer receiving a larger tax refund might take this step.
People will need to file for the second half of their child tax credits in the spring of 2022, when filing their 2021 tax returns.
Maximum child tax credit amount for 2021
In 2021, the maximum child tax credit for U.S. filers is $3,000 per qualifying child between ages 6 and 17. For families with children younger than age 6, each of those children qualifies you for a total of $3,600 in 2021 tax credits.
In 2020 and previous years, the total allotted tax credit per child was $2,000. So, the new legislation passed in 2021 increased the maximum by $1,000.
How do I get child tax credit payments?
For most Americans, as long as the IRS already has your relevant information such as how many dependent children you have and the account information for the bank where you’d like your credit to appear, you don’t need to do anything. The agency will use either 2019 or 2020 tax returns to calculate your credit.
If you haven’t filed your 2020 tax return yet, that’s the first step to receiving tax credits for your children.
According to the IRS, other basic qualifications to receive child tax credits include:
You or your spouse, if you file joint tax returns, must have your primary home in the U.S. for at least six months out of the year.
- Your maximum income must not exceed $75,000 for individuals and $150,000 for couples filing jointly.
If you don’t have to file taxes, use the “Non-Filers: Enter Payment Info Here” tool at IRS.gov to provide necessary information for receiving tax credits.