Advance Child Tax Credit
What is the Advance Child Tax Credit?
Congress has told the IRS to begin making advance Child Tax Credit (CTC) payments on July 15, 2021 to eligible households. You will receive $300 for each child under the age of 6 (as of 12/31/21) and $250 for each child ages 6-17 (as of 12/31/21). The payments will be every month on or around the 15th. through the end of 2021.
Does my 18-year-old high school student or my college student qualify for the CTC?
Adult children who are 18 years old (as of 12/31/21) or full-time college students 19-24 (as of 12/31/21) who are claimed as dependents are not eligible for the CTC. You can, however, receive a one-time tax credit of $500 for them in April 2022 when you file your 2021 tax return.
Is my family eligible for the advance CTC?
If you're eligible for the advance child tax credit and filed your taxes in 2020, you don't need to apply or sign up.
To qualify for the advance child tax credit, parents must:
Have at least one child under 18 years old;
Make less than $75,000/year if filing alone, or less than $150,000 if filing jointly, or less than $112,500 for unmarried single parents;
Reside in the United States for at least six months; and
Live with the child being claimed as a dependent for at least half the year.
How much is the 2021 CTC?
Your 2021 tax forms will have up to a $3,600 Child Tax Credit for children under 6 and up to a $3,000 CTC for children 6-17. Half of those will be paid in advance for help with COVID hardships during the second half of 2021.
I didn't think I was eligible, but I received the 2021 CTC on July 15, 2021. Do I have to pay it back if I make too much this year?
If the total is greater than the Child Tax Credit amount that you are allowed to claim on your 2021 tax return, you may have to repay the excess amount on your 2021 tax return during the 2022 tax filing season.
Family and life situations can be fluid throughout a given year. The following list provides examples of changes that could result in excess advance Child Tax Credit payments.
A qualifying child who resided with you may change homes during 2021 and reside more than half of the 2021 tax year with a different individual.
Your income increases in 2021.
Your filing status changes for 2021.
Your main home was outside of the United States for more than half of 2021.
As a result of these types of ordinary family and life changes, you may receive a total amount of advance Child Tax Credit payments that exceeds the amount of Child Tax Credit that you properly are allowed on your 2021 tax return.
If you qualify for the repayment protection described below, you will be excused from repaying some or all of the excess amount. If you do not qualify for repayment protection, you will need to report the entire excess amount on your 2021 tax return as additional income tax. This additional income tax will reduce the amount of your tax refund or increase your total tax due for 2021.
You Do Qualify: You qualify for full repayment protection and won’t need to repay any excess amount if your main home was in the United States for more than half of 2021 and your modified adjusted gross income (AGI) for 2021 is at or below the following amount based on the filing status on your 2021 tax return:
$60,000 if you are married and filing a joint return or if filing as a qualifying widow or widower;
$50,000 if you are filing as head of household; and
$40,000 if you are a single filer or are married and filing a separate return.
You Don't Qualify: You won’t qualify for any repayment protection if your modified AGI is at or above the amounts listed below based on the filing status on your 2021 tax return.
$120,000 if you are married and filing a joint return or if filing as a qualifying widow or widower;
$100,000 if you are filing as head of household; and
$80,000 if you are a single filer or are married and filing a separate return.
We don't need the money now and want it at tax-time. Can we opt-out?
You can unenroll or opt-out at any time. If you decide to opt-out, you can claim the remaining CTC on your 2021 tax return. If you receive ANY advance CTC payments you MUST report this to your CPA at tax time or you will underpay your tax bill and owe the IRS.
To unenroll or opt-out go to Child Tax Credit Update Portal. The process is quite easy, but is irreversible.
Payment Month Unenrollment Deadline Payment Date
July 6/28/2021 7/15/2021
August 8/2/2021 8/13/2021
September 8/30/2021 9/15/2021
October 10/4/2021 10/15/2021
November 11/1/2021 11/15/2021
December 11/29/2021 12/15/2021