The information in this article was last updated on Aug. 10, 2021. This article relates to the tax laws enacted during the COVID-19 pandemic. These laws may have expired or reverted to their original state. For the most recent updates, please see the Child Tax Credit.
The American Rescue Plan expanded the Child Tax Credit (CTC) as well as changed some of the existing requirements for tax year 2021.
At a glance:
- 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
- Families who received advance payments of the CTC should also receive a Letter 6419 from the IRS sometime in Dec., 2021 or Jan., 2022.
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.
Is the Child Tax Credit 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 (the return you’ll file in 2022).
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.
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?
Depending on your situation, you may have received up to half of your Child Tax Credit as monthly payments sent to you from the IRS. In that case, you’ll claim the remaining credit when you file your tax return in 2022.
If you opted out or did not receive the payments you were entitled to, you’ll claim the full credit amount you deserve when you file.
You should receive a Letter 6419 from the IRS with the total amount of advance Child Tax Credit payments that were sent to you in 2021. The IRS is sending this notice to eligible taxpayers in January, 2022. It’s important to keep this document with your tax records. It will make it easier to report the amounts you received and calculate your remaining credit.
TaxSlayer makes it easy to claim the Child Tax Credit. Start filing now.
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.
What should I do if I don’t have Letter 6419?
If you do not have a Letter 6419, you should be able to see the advance payments you’ve received using this IRS portal.
It’s important to report the correct amount of advance payments you received when you file your return. This helps ensure that you get any additional credit that you’re due and prevents your refund from being delayed.
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.
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 IRS began delivering monthly payments of up to $300 per qualifying child on July 15, 2021. These payments will continue throughout the end of the year. You can expect to receive half the total credit amount you are due in monthly advance payments; you’ll claim the remaining half as a credit when you file your 2022 return.
The IRS sent two letters (one in June and one in July) to families who may be eligible to receive the 2021 Child Tax Credit. 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.
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.
I had a baby in 2021. Can I claim the Child Tax Credit?
The Child Tax Credit includes babies born in 2021 (including on December 31, 2021). Anyone who has a qualifying child under 6 at the end of 2021 and earns less than the income limits described above could receive up to $3,600 in credit.
How do I change my personal information with the IRS?
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.