Can the Advance Child Tax Credit Help Your Family?

As a result of the pandemic, Congress enacted a series of relief plans, including the Child Tax Credit. The program is projected to keep five million children out of poverty this year and issue monthly payments to eligible households.

What Is the Child Tax Credit, Exactly?

The plan is to provide direct monthly payments to qualified low or middle-income households with children aged up to 17. The program allows families to collect six monthly payments for half of the full benefit amount. The rest of the benefit amount will be in the form of credit the following year when you file your taxes. The program is phased out for tax filers earning above certain basic income thresholds.

Can I Qualify for the Advance Child Tax Credit Payments?

To be eligible, Advance Child Tax Credit Payments, you must file a 2019 or 2020 Federal Income Tax return or use the non-tax filer tool located on the IRS website.

If you signed up to receive the stimulus payment, it is not required to sign up for the Child Tax Credit program using the non-tax filer tool. The IRS will automatically register qualified households for the Child Tax Credit based on data provided in your most recent return. Eligible beneficiaries should also receive detailed information through e-mails regarding upcoming scheduled payments, based on your Adjusted Gross Income (AGI) information from your most recent tax return.

The benefit is available for taxpayers with annual income up to:

  • $150,000 for married couples filing a collective tax return or qualified widow/widower and $112,500 for heads of the house
  • $75,000 if filing as a person, single tax filer, or married person filing separately

You are not eligible if your income exceeds these guidelines.

How Much Does the Family Receive from Child Tax Credit?

In 2021, the maximum child tax credit for children aged under six increased to $3,600 per child and $3,000 per child for children aged between 6 to 17. Previously, the tax credit maximum was $2,000 for each qualified child.                                                                                                       

Monthly payments will be for half the total benefit amount starting in July 2021, which is $300 for each child under six years of age and $250 per month for each child aged between 6 to 17. The remaining credit is to be claimed with your tax return the following year.

How Are the Child Tax Credit Payments Delivered? 

As noted, the Advance Child Tax Credit payments are issued monthly for half of the total credit amount. Payments begin in July 2021 and end after six months in December 2021. Previously, qualified households claimed the Child Tax Credit is only filing taxes. 

What to Do If I No Longer Qualify for the Program?

If you have a high income and cannot claim the Child Tax Credit, you can opt out of the program on the federal website.

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