Advance Child Tax Credit Payments

There have been important changes to the Child Tax Credit (CTC) that will help many families receive advance payments starting this summer. The American Rescue Plan Act (ARPA) of 2021 expands the Child Tax Credit (CTC) for the tax year 2021 only.

The expanded credit means:

• The credit amounts will increase for many taxpayers.
• The credit for qualifying children is fully refundable, which means that taxpayers can benefit from the credit even if they don't have earned income or don't owe any income taxes.
• The credit will include children who turn age 17 in 2021.
• Taxpayers may receive part of their credit in 2021 before filing their 2021 tax returns.
• For the tax year, 2021, families claiming the CTC will receive up to $3,000 per qualifying child between the ages of 6 and 17 at the end of 2021. They will receive $3,600 per qualifying child under age 6 at the end of 2021. Under the prior law, the amount of the CTC was up to $2,000 per qualifying child under the age of 17 at the end of the year.

The increased amounts are reduced (phased out), for incomes over $150,000 for married taxpayers filing a joint return and qualifying widows or widowers, $112,500 for heads of household, and $75,000 for all other taxpayers.

Advance payments of the 2021 Child Tax Credit will be made regularly from July through December to eligible taxpayers who have a main home in the United States for more than half the year. 

Eligible taxpayers do not need to take any action now other than to file their 2020 tax return if they have not done so. 

Eligible taxpayers who do not want to receive an advance payment of the 2021 Child Tax Credit will have the opportunity to decline to receive advance payments. Taxpayers will also have the opportunity to update information about changes in their income, filing status, or the number of qualifying children. 

Visit the IRS website for more information. or the Get It Back website.