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2021 Advanced Child Tax Credits and How it Works

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For tax year 2021, the Child Tax Credit increased from $2,000 per eligible child to $3,600 per child ages five and younger and $3000 for children ages six to 17. The amount of Advanced Child Tax Credits is half of the new credit amounts. So, starting July 2021, if you are eligible, you will start to receive monthly Advanced Child Tax Credit payments. If your child is five years old or younger, the payment would be $300 per month through December. That is $1,800, or half of the new Child Tax Credit amount. If you have children between the ages of six and 17, your monthly payment will be $250 per month through December, or $1,500 total.

To qualify for the advanced Child Tax Credit, you must have:

  1. Filed a 2019 or 2020 tax return.  If you are not required to file a 2020 tax return and believe you may be eligible, sign up on the IRS website at https://www.irs.gov/credits-deductions/child-tax-credit-non-filer-sign-up-tool .  
  2. A qualifying child.  
  3. A main home in one of the 50 states or the District of Columbia for more than half of the year.  
  4. Made less than certain income limits.

A qualifying child for 2021 Child Tax Credits is an individual who does not turn 18 before January 1, 2022, and also fits the following requirements: 

  1. The individual is the taxpayer’s son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of any of them.
  2. The individual does not provide more than half of his or her own support during 2021.
  3. The individual lives with the taxpayer for more than half of tax year 2021.
  4. The individual is properly claimed as the taxpayer’s dependent.
  5. The individual does not file a joint return with the individual’s spouse for tax year 2021 or files it only to claim a refund of withheld income tax or estimated tax paid.
  6. The individual was a U.S. citizen, U.S. national, or U.S. resident alien.

NOTE: Advance Child Tax Payments amounts are not based on the credit of other dependents.  

Remember these are tax credits that are being paid in advance, so if you receive them when you go to file your 2021 tax return, you will only be receiving half of the credit since the other half was paid to you. If you determine that you do not want the IRS to send the advanced payments, you can opt-out. To unenroll from the IRS, visit https://www.irs.gov/credits-deductions/child-tax-credit-update-portal.


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