Child tax credit 2021 FAQ: Payment dates, opt out deadlines, eligibility rules and more - CNET

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The first advance monthly child tax credit payment comes July 15, with recurring checks through the end of 2021. 

Sarah Tew/CNET

Parents who qualify for the child tax credit will see their first advance monthly installment of $250 or $300 per dependent in just 11 days. Some new IRS resources are giving families what they need to prepare, including some online registration tools to check eligibility, payment amounts and the option to unenroll from the monthly payment program. 

If your family isn't typically required to file a tax return because your income doesn't meet tax-filing requirements, you'll have to move fast on using the new IRS nonfiler tool or preparing a tax return. Overpayment for the child tax credit is something else you'll need to keep an eye on -- a real (but hopefully uncommon) situation that could have you owing the IRS money next tax season. 

Another useful tool to help you plan or budget in advance is CNET's child tax credit calculator, which gives you a total payment estimate based on the number and ages of your kids. We've compiled some information on how parents might want to use money and how to claim up to $16,000 more for your child care costs. This story has been updated recently.

What is the child tax credit monthly payment schedule?

The first thing to know is you won't get your child tax credit payments all at once in 2021. Unless you tell the IRS you want to unenroll from the advance monthly payments, you'll get six checks in 2021 and one in 2022. The second thing to know is that half of your total child tax credit payment will come this year, with the other half as part of your tax refund in 2022. 

So in other words, your largest single payment arrives next year. Until then, you get six smaller payments this year to start using right away. The idea is to bring you money sooner, which is why the checks will start coming in 2021 as "advance payments."

Child tax credit payment schedule

Monthly	Maximum payment per child 5 and younger	Maximum payment per child; 6 to 17
July 15: First 2021 check	$300	$250
Aug. 13	$300	$250
Sept. 15	$300	$250
Oct. 15	$300	$250
Nov. 15	$300	$250
Dec. 15: Last 2021 check	$300	$250
April 2022: Second half of payment	$1,800	$1,500

What does it mean to unenroll from the monthly payments?

You aren't obligated to receive the advance monthly child tax credit payments this year. Instead, you can choose to get one payment in 2022, and the new Child Tax Credit Update Portal will allow you to do so. You may want to unenroll if you'd rather have one large payment for a projected expense in 2022, or if you're concerned the IRS might overpay you this year and you don't want to be saddled with an outstanding debt later. However, if you haven't unenrolled yet, the deadline to do so was June 28, so you'll still get the July 15 payment. You can still opt out of the August through December payments.

What do the IRS child tax credit portals help families do?

In June, the IRS opened more online tools and portals. The first portal is for people not normally required to file an income tax return, including low-income families. The new Child Tax Credit Eligibility Assistant tool helps families quickly determine whether they qualify. 

The latest Child Tax Credit Update Portal currently allows families to view their eligibility, manage their payments and unenroll from the advance monthly payments. It also now lets parents update their direct deposit information. In coming months, it will allow families to update other information if their circumstances have changed: for example, if a new child has arrived or will arrive in 2021 who isn't reflected on a 2020 tax return.

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How are the amounts determined for each child?

How the child tax credit payments will be divided between 2021 and 2022 might be confusing. For each qualifying child age 5 and younger, up to $1,800 (half the total) will come in six $300 monthly payments this year. For each kid between the ages of 6 and 17, up to $1,500 will come as $250 monthly payments six times this year. 

The IRS bases your child's eligibility on their age on Dec. 31, 2021, so a 5-year-old child turning 6 in 2021 will qualify for a maximum of $250 per month. For both age groups, the rest of the payment will come with your 2021 tax refund when you claim the remainder of the credit in 2022. 

If you have a dependent who is 18 years old, they can qualify for $500 each. Dependents between the ages of 19 and 24 may qualify as well, but they must be enrolled in college full-time. Here's more on the financial details for qualified dependents. 

2021 child tax credit maximum payments

Ages 5 and younger	Up to $3,600, with half as $300 advance monthly payments
Ages 6 to 17	Up to $3,000, with half as $250 advance monthly payments
Age 18	$500 one-time check
Ages 19 and 24, full-time college students	$500 one-time check

Will babies born this year qualify for the child tax credit?

If you have a baby in 2021, your newborn will count toward the child tax credit payment of $3,600. Children who are adopted can also qualify if they're US citizens. You'll be able to update the IRS on a new dependent when that aspect of the Update Portal is made available. 

What happens if a payment doesn't arrive when it should?

One thing to keep in mind is that the IRS is targeting the payment dates (see above). If you have direct deposit set up with the IRS, you might see a pending payment before the actual closing date. That means you might not be able to access the money right away, but that it's in process.

It could take longer for your payment to arrive if you're receiving the check by mail, or in the form of an EIP card. If enough time has passed and you're concerned there may be a problem, you can use the IRS web portal to correct information. You'll also want to make sure you let the IRS know if you moved (not just the US Postal Service).

What if the IRS sends too much in a payment? 

Since the IRS uses your 2019 or 2020 tax return, your family may not qualify for the child tax credit payment when you file your 2021 tax return in 2022. In this case, you may have to repay the IRS some or all of the credit. The child tax credit rules aren't as flexible as the stimulus check rules regarding overpayment. One example of when this would happen is if you and the other parent of your child (who is not your spouse) were both paid for the child tax credit for the same dependent.

To avoid this tax inconvenience, make sure all your information is updated before the payments start arriving. The new Update Portal will let you make adjustments in the coming months to verify your new income and marital status. 

What should families do if they don't usually pay or file taxes?

Payments will be automatic for those who filed their 2020 tax returns by the May 17 deadline (or those who claimed all their dependents on a 2019 tax return). But what if that's not you? Parents who didn't file taxes should use the new IRS tool, called the "Non-filer Sign-up tool," to get their money, even if you're not usually required to file. This will let the IRS know your income level and how many dependents are in your household who count toward the child tax credit benefits. 

You could also file a tax return to get the full monthly child tax credit payment you're owed. The IRS is offering information about free tax days in major cities to outreach to families who still need to file a 2020 return. 

The larger child tax credit can help families that have faced financial hardship due to the pandemic. 

Sarah Tew/CNET

What are the income thresholds to qualify for the credit?

Income limits determine how much you will receive and if you even qualify, though there is no limit on the number of children you can receive credit for as long as you're eligible. 

The amount you'll get will phase out for people with higher incomes. Single filers earning more than $75,000 per year, heads of household earning more than $112,500 per year and married couples earning more than $150,000 a year will not be eligible for the full amount. Your child tax credit payments will begin to phase out by $50 for every $1,000 of income over those threshold amounts, according to Joanna Powell, managing director and certified financial planner at CBIZ.

Can parents with shared custody get the payments?

For the first two stimulus checks, some parents who shared custody of a child but weren't married to each other were entitled to each claim money for the same child. That was only if they alternated years for claiming the dependent -- in other words, if one parent claimed the child on their taxes in odd years and the other claimed the child on their taxes in even years.

This is no longer allowed for the third check, and we're told it won't work that way for the child tax credit payments either. Here's what we know so far about the child tax credit and shared custody situations.

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