Everything You Need to Know About the 2021 Child Tax Credit

The American Rescue Plan expanded the Child Tax Credit as well as changed some of the existing requirements for tax year 2021.  

  • Families can receive more money per qualifying child 
  • The money will be sent in monthly payments unless the family opts to receive it in their 2021 tax refund 
  • The credit is refundable 

The IRS plans to keep this Advance Child Tax Credit page up to date with the most recent info and links to new tools once they are finalized.

How much is the Child Tax Credit in 2021? 

Families will receive up to $3,000 per qualifying child between the ages of 6 and 17. Families with children under age 6 will receive $3,600 per qualifying child.  

Who qualifies for the 2021 Child Tax Credit? 

Two groups qualify for this credit: families with qualifying children between the ages of 6 and 17 and families with qualifying children under the age of 6. 

The credit amount phases out for single filers who make over $75,000 a year, heads of household who make over $112,500 a year, and married couples filing jointly who make over $150,000 a year. 

The IRS will look at your 2020 tax return to determine if you and your dependents are eligible. If your 2020 return is not filed or processed yet, the IRS may use your 2019 tax return. File now with TaxSlayer

Note: If your income is too high to qualify for the expanded Child Tax Credit amount, the $2,000 Child Tax Credit is still available for single filers who earn less than $200,000 and couples who earn less than $400,000. This credit is partially refundable, up to $1,400.

How do I claim the new child tax credit? 

File your 2020 tax return. Eligible taxpayers do not need to take any other actions to claim the credit. 

IMPORTANT: If you are not required to file taxes but still want to claim the credit, use the IRS Non-Filer Sign-Up Tool here. Be sure to read the instructions for the portal carefully. If you have already filed 2020 taxes or you plan to, then do not use the Non-Filer Sign-Up Tool.

Can I opt out of advance Child Tax Credit payments?

Yes. You can decline your advance payments using the IRS portal here. By opting out, you will claim and receive the full credit amount you are entitled to when you file your taxes in 2022.

Is the credit fully refundable? 

Yes, the Child Tax Credit is fully refundable for tax year 2021. This means that you can receive the entire amount you qualify for either as advance payments or in your tax refund when you file your 2021 tax return 

Does this credit replace the existing Child Tax Credit? 

There is only one federal Child Tax Credit. The American Rescue Plan has simply expanded the credit for the 2021 tax year in the following ways:

  • The credit amount increased from $2,000 to up to $3,600 for qualifying families
  • Eligible taxpayers can receive up to $300 per month as advance payments of the credit
  • There is no minimum income requirement to qualify for the credit
  • The credit is fully refundable

When will I start receiving the new credit? 

The Biden administration announced that they will start sending the monthly payments of up to $300 on July 15, 2021. These payments will continue throughout the year until you receive the amount you qualify for in full. 

The IRS started to send letters to families who may be eligible to receive the 2021 Child Tax Credit on June 7th. This information is based on 2020 tax returns. If you have not filed your 2020 return or if it hasn’t been processed yet, the IRS may use your 2019 return. Families who used the Non-Filers tool last year may also receive a letter.

These families should expect a second letter prior to July 15th detailing an estimate of their monthly payment.

For more information, visit the IRS’s Advance Child Tax Credit page. The IRS plans to house the new portal for updating information here, as well as an interactive tool that helps families determine whether they qualify for the payments.

If I have a baby in 2021, will I receive the new credit? 

Anyone who has a child under 6 at the end of 2021 will qualify for $3,600 as long as they are not phased out by the income limits described above. This includes babies born on December 31, 2021. The IRS is opening a portal for you to update your family size to include newborns.  

What if my personal information changes during 2021? 

The IRS is setting up an online portal for you to update your information if you have a change of address, family size, or bank account since filing your 2020 taxes. A link to the portal will be provided here once it becomes available.