2021 Child Tax Credit Updates
If you are already receiving payments and would like to update your information or manage your payments, please follow this link
Child Tax Credit Update Portal | Internal Revenue Service (irs.gov)
Beginning July 15th, 2021, eligible tax payers will begin receiving advanced child tax credit payments. There are many new changes to this credit for the 2021 year which I am sure will create some questions. We will try to answer them below.
Q: Is everyone eligible for the increased child tax credit amount?
A: No. The increased amount begins phasing out for tax payers filing single at $75,000 AGI, head of household begins phasing out at $112,500 AGI, and married filing jointly begins phasing out at $150,000 AGI. The extra amount of the child tax credit above the original $2,000 credit (either $1,000 or $1,600) will be reduced by $50 for every $1,000 over the AGI. The original $2,000 credit will not be affected and will stay in place no matter your AGI.
Q: What will my payment be?
A: The amount of the credit is being increased from $2,000 to $3,600 for children ages 0-5 and $3,000 ages 6-17. Note that 17 year olds are included in this credit for 2021 as opposed to not being eligible in previous years. Monthly payments (being sent on 7/15, 8/13, 9/15, 10/15, 11/15, and 12/15) will be $300/month for ages 0-5 and $250/month for ages 6-17 per eligible child.
- A taxpayer with 2 children, ages 4 and 17, will receive $550/month
- A taxpayer with 4 children, ages 2, 5, 8, and 12, will receive $1,100/month
Q: Will I receive the whole credit in monthly payments?
A: No. Only half of the credit will be sent out in monthly installments. The other half of the credit will be claimed on the 2021 tax return.
- A tax payer has one child age 3, he/she will receive $1,800 ($300 x 6) in monthly installments and $1,800 as a credit on their tax return.
- A tax payer has 3 children ages 5, 8, and 11, he/she will receive $4,800 ($800 x 6) in monthly installments and $4,800 as a credit on their tax return.
Q: Do I have to receive my credit in monthly payments?
A: No. The IRS plans to open up a portal in the coming days that you can opt out of the monthly payments. If you do not opt out on their portal, you will automatically start receiving the monthly payments if you are eligible based on your 2020 or 2019 return. The IRS will reference the latest filed tax return to determine your eligibility.
Q: How do I update my information for the IRS if there have been changes since I last filed my tax return?
A: The IRS plans to also open a different portal in order for tax payers to update their information. If your income has increased/decreased, your filing status has changed, or if you have had another child since your last return was filed, you may want to update that information to get a more accurate credit.
We will be updating the site with the most up to date information as it becomes available to us.
Create Account – Non-filer Sign-up Tool (freefilefillableforms.com)
If you are not required to file a tax return and want to get your information to the IRS to be qualified for the advanced child tax credit, follow the above link. You will need to first set up an account then follow the prompts to complete the forms.
If you want to opt out of the Child Tax Credit advanced monthly payments, follow the link above. You will first need to set up an account if you don’t already have an account set up with the IRS.