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How Do You Know if You’re Eligible for the Child Tax Credit?

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Jul. 14 2021, Published 11:43 a.m. ET

Starting Jul. 15, many U.S. parents will receive some extra cash from the government as part of the child tax credit included in Joe Biden’s American Rescue Plan.

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The amount you're eligible to receive varies, with some parents not eligible to receive the credit at all.

Who isn’t eligible for the child credit?

Eligibility for the automatic child tax credit comes down to the age of your child and your income. If your income is over a certain threshold, it’s possible you aren’t eligible to receive a child tax credit.

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When determining your eligibility, the IRS looks at your AGI (adjusted gross income) on your 2020 or 2019 tax returns. If you're a single filer or file as head of household, your AGI must be below $240,000 to receive a child tax credit. For a couple filing jointly, their AGI has to be below $440,000.

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Most parents with children aged 17 and younger will receive some credit, but that amount also varies depending on the child’s age. The child must live with them at least six months of the year and have a Social Security number.

If you're eligible to receive a child tax credit, you'll receive up to $3,600 per child aged 5 and under or up to $3,000 for a child aged 6 to 17. You can also receive $500 for dependents aged 18 or full-time college students aged 19 to 24.

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What does my income need to be to receive the child tax credit?

You'll receive the full child tax credit if you're a single filer with an AGI of $75,000 or less, a head of household with an AGI of $112,500 or less, or a couple filing jointly with an AGI of $150,000.

How much does the child tax credit phase out after the income limit?

Child tax credit payments gradually decline, or phase out, by $50 for every $1,000 over those income thresholds. For example, if you're a single filer with an AGI of $80,000 and a child under age 5, your child tax credit amount would be $3,350.

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Source: IRS Twitter

Families eligible to receive some amount of child tax credit payments should have received a letter from the IRS last month notifying them of their eligibility. Eligible taxpayers have the option of claiming 100 percent of the credit on their 2022 taxes or claiming 50 percent and receiving the other 50 percent in six monthly payments that are sent automatically. Those advance payments are scheduled to start Jul. 15.

How do I receive my child tax credit if I didn’t file a tax return?

The IRS bases the amount of child tax credit you can receive on the income and number of dependents you claimed on your 2020 or 2019 tax returns. If you're a nonfiler who didn’t file taxes, the IRS has no information to base the payments on. To make sure you receive your credit payments, you can visit the IRS Child Tax Credit Non-filer Tool and enter your mailing address, dependents, and bank account information.

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