The American Rescue Plan Act of March 2021 changed a number of provisions for the child tax credit – these tax changes are temporary and only apply to the 2021 tax year.

• Raised the age of qualifying children to 17 from 16
• Increased the amount for certain taxpayers
• Made the credit fully refundable (meaning you can receive it even if you don’t owe the IRS)
• May be partially received in monthly cash payments

Beginning July 15, 2021, the IRS will automatically pay half the credit in the form of advance monthly payments.  Taxpayers will then claim the other half when they file their 2021 income tax return.  

Qualifications

To qualify for the child tax credit monthly payments, you (and your spouse if you file a joint tax return) must have: 

1. Filed a 2019 or 2020 tax return and claimed the child tax credit or given the IRS your information using the non-filer tool; 
2. A main home in the U.S. for more than half the year or file a joint return with a spouse who has a main home in the U.S. for more than half the year;
3. A qualifying child who is under age 18 at the end of 2021 and who has a valid Social Security number; and
4. Income less than certain limits 

You can take full advantage of the credit if your income (specifically, your modified adjusted gross income) is less than $75,000 for single filers, $150,000 for married filing jointly filers and $112,500 for head of household filers. The credit begins to phase out above those thresholds.  

Higher-income families (e.g., married filing jointly couples with $400,000 or less in income or other filers with $200,000 or less in income) will generally get the same credit as prior law (generally $2,000 per qualifying child) but may also choose to receive monthly payments.  

How much to expect

The child tax credit and advance payments are based on several factors, including the age of your children and your income. 

• The credit for children ages five and younger is up to $3,600 – with up to $300 received in monthly payments.
• The credit for children ages six to 17 is up to $3,000 – with up to $250 received in monthly payments. 

What do I need to do?

Taxpayers generally won’t need to do anything to receive any advance payments as the IRS will use the information it has on file to start issuing the payments.  

IRS’s child tax credit update portal

Using the IRS’s child tax credit and update portal, taxpayers can update their information to reflect any new information that might impact their child tax credit amount, such as filing status or number of children. Parents may also use the online portal to elect out of the advance payments or check on the status of payments.

The IRS also has a non-filer portal to use for certain situations.  

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