What You Need to Know About Advance Child Tax Credit Payments

Have questions about advance payments for the Child Tax Credit for 2021? Look no further, we've got the answers.

Father and Daughter spend time together after receiving the 2021 Child Tax Credit.

Beginning in July, eligible taxpayers will receive advance payments of the Child Tax Credit (CTC) for 2021. Before we dive into the details, here are a few key things to know:

  • Eligible taxpayers can expect to receive a monthly payment of $250 per child (ages 6 to 17) or $300 per child (below age 6). However, payments decrease based on income level (read on for more details).
  • Payments are being sent on July 15th, and will continue monthly until Dec. 15, 2021.
  • If the IRS has the appropriate bank information, payments will be sent via direct deposit. Otherwise, eligible taxpayers may receive their payment in the mail.
  • Payments will be issued on July 15, Aug. 13, Sept. 15, Oct. 15, Nov. 15 and Dec. 15.

Still have questions? We’re here to help. Read on for additional details, or visit IRS.gov for more information.

What’s going on here?

Put simply, families claiming the Child Tax Credit will receive more money from the government in 2021. The CTC was expanded as part of the American Rescue Plan Act that Congress passed earlier this year, and some of that money will be distributed monthly via direct payments from July 15 through Dec. 15, 2021.

The most notable changes to the Child Tax Credit for 2021 include:

  • Families claiming the CTC will receive up to $3000 per qualifying child between the ages of 6 and 17, or up to $3600 per qualifying child under age 6 at the end of 2021.
  • Up to 50 percent of the total CTC benefit per family will be distributed once a month, from July 15 to Dec. 15, 2021. The other half will be claimed when taxpayers file their 2021 tax return.
  • The credit is fully refundable, meaning that families can receive payments regardless of earned income or federal income tax owed.

Am I eligible for the Child Tax Credit?

Taxpayers whose primary residence is in the United States and who live in it for at least half of the year are eligible for the Child Tax Credit. However, income thresholds may impact how much you can expect to receive. Note that these thresholds are based on the tax return for 2020.

Payments begin to phase out for:

  • Married couples who file a joint tax return and earn more than $150,000 per year.
  • Heads of households earning more than $112,500 per year.
  • All other taxpayers earning more than $75,000 per year.

More information on eligibility can be found on the IRS website by clicking here.

What do I need to do to receive payments?

In most cases, the IRS will use information already supplied to them to determine eligibility and disperse payments. In other words, eligible families will receive their payments automatically – without any additional action required.

If however, you have not filed a 2020 or 2019 tax return, some action may be required. Visit IRS.gov for more information.

How will I receive my payments?

Payments will be issued in the same way that previous stimulus payments were distributed. If you received a stimulus payment via direct deposit, you can expect the same for your CTC payments. Similarly, if your stimulus check arrived in the mail, you’ll likely get a paper check again for these payments.

If you’re a UW Credit Union member, you can receive notifications to alert you when your CTC payment is available in your account. Click here to learn how to set up notifications.

Note: Payments may show up in your account as “pending” prior to funds being available. Funds are available on the settlement date.

I have more questions. Where can I go for answers?

The Internal Revenue Service has a dedicated website for questions related to the expanded CTC and advance CTC payments. On that website, you can learn more about the program, determine your eligibility, calculate how much money you might receive and more.

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