2021 Child Tax Credit Stimulus Payments: How much will I get and when?

June 17, 2021 : H&R Block

More money is coming to more families — and soon. That’s the main takeaway of the changes implemented to the Child Tax Credit (CTC) this year. As part of the March 2021 stimulus bill, the value of the credit as well as the age limit have been increased. The CTC is now fully refundable, which means you can receive the credit even if you don’t owe the IRS. 

Family that qualifies for the child tax credit

Additionally, half of the credit will be distributed in advance of the 2022 filing season (when you’d file your 2021 return). In fact, nearly 90% of American children will be covered by advance payments of the credit according to the IRS.

With news of the advance Child Tax Credit stimulus payments comes questions: How much will we get? When will the Child Tax Credit advance payments start? Where will our money go and how do we update our information? You’ll find those answers and more, including those for Emerald Card  holders, here.

New 2021 Child Tax Credit and advance payment details

Child Tax Credit amounts will be different for each family

  1. Your amount changes based on the age of your children. The payment for children:
    • Ages five and younger is up to $3,600 in total (up to $300 in advance monthly)
    • Ages six to 17 is up to $3,000 in total (up to $250 in advance monthly)
  2. Your amount changes based on your income. You’re eligible for the full amount if your Modified Adjusted Gross Income is under:
    • $150,000 for Married Filing Jointly or Qualified Widow(er)s
    • $112,500 for head of household filers, and
    • $75,000 for single and Married Filing Separate

A portion of your amount is reduced (“phases out”) by $50 for every $1,000 over the limits listed above. 

Advance payments for the Child Tax Credit start July 15

Families can expect the first payments to be received by direct deposit on or around July 15, 2021. Then, they’ll continue monthly on the 15th of each month unless the 15th falls on a weekend or holiday. For those receiving checks, they’ll be mailed around the same time.

Your last tax return generally determines where your payment will be sent

For most people, it will go to the bank account where you received your 2020 refund (or 2019 if that’s the last time you filed). Or, it will be sent to the physical address on your return if there wasn’t a bank account tied to your filing.

For eligible H&R Block Emerald Card holders, the money will be sent to your card if that’s where you received your most recent refund. You should make sure you have your Emerald Card handy.  If you need a new card, please call 1-866-353-1266.

If you didn’t file a 2019 or 2020 return, you can provide your information to the IRS by filing a tax return. 

Most people don’t have to do anything to get the advance payments

Nothing is required by the IRS to get the payments for most people – they’ll be automatic if you’ve filed a 2020 or 2019 tax return. If you have updates to your personal information or want to opt out, you’ll need to take action. We’ll explain more below.

Your last return is also the basis for your CTC calculation

The IRS will use your 2020 (or 2019) tax return details — meaning your income and dependent information — to estimate your amount for the advanced Child Tax Credit. 

Advance Child Tax Credit payments: How to make changes with the IRS

The IRS is creating an online portal to allow families to make certain changes. The portal is expected to launch at some point in June allowing you to opt out of advance payments. In the coming months, you’ll also be able to use the portal to update your:

  • income,
  • mailing address,
  • bank account information,
  • qualifying children, and
  • marital status.

Visit the IRS’ website at http://www.irs.gov/childtaxcredit2021 for additional details and ongoing information updates. H&R Block will also update this page when we have more information.

You can opt out of payments, if you prefer, starting when the portal opens in June

If you prefer to receive your full Child Tax Credit when you file in 2022, you can use the IRS portal to opt out. You can opt out at any time before Dec. 15 — even if you’ve already received earlier payments.

There are two reasons you may wish to opt out:

  • You prefer to receive the full CTC when you file your 2021 tax return, or
  • Your income or family situation has changed since last year, and you may be liable for repaying some or all of the advanced payments.

Depending on your situation, opting out could help you avoid receiving payments that may need to be paid back (see our FAQs below).

New 2021 Child Tax Credit and Advance Payment FAQs

I heard I might have to pay some of the credit back. What’s that about?

There are a few times that might happen:

  • Your child is no longer your qualifying child, such as if they are no longer a dependent on your return.
  • Your income increased in 2021 and you no longer qualify for the full amount.
  • You alternate claiming your child with the other parent and should not have received the advance.

To avoid overpayment, you may consider using the IRS portal when it’s available to opt out of payments.

Would everyone have to pay the money back?

If your income is below the following thresholds, you’re not required to repay up to $2,000 per qualifying child (i.e. the “safe harbor” amount). 

  • Single: $40,000 
  • Head of Household (HOH): $50,000 
  • Married Filing Jointly (MFJ): $60,000 

The safe harbor is reduced for filers with income between: 

  • Single: $40,000 and $80,000 
  • HOH: $50,000 and $100,000 
  • MFJ: $60,000 and $120,000 

If your income exceeds these thresholds, you will be responsible for repaying the full amount of any overpayment on your tax return. 

What if I don’t want the Child Tax Credit in advance?

You can wait and get it all at tax time. Starting sometime in June, you’ll be able to opt out using the IRS portal. We’ll share the portal link and instructions here when available.

I alternate claiming my child with their other parent. How does this affect us?

It’s not entirely clear from the IRS if the parent who claimed the child on their 2020 return will receive the advance portion of the payments. As we learn more from the IRS and Treasury Department, we’ll update this answer.

What was the previous Child Tax Credit worth?

Previously, the CTC provided $2,000 for each qualifying child under the age of 17. In addition to the higher amounts mentioned above, children aged 17 are now eligible.

Is the Child Tax Credit subject to offsets?

Advance payments made under these new rules are not subject to offset for past due child support, federal tax debts, state tax debts, and collection of unemployment compensation debts. However, the amount claimed on the taxpayer’s 2021 return as a refund would generally be subject to offset. 

What about residents of Puerto Rico and other U.S. territories?

The new law provides for payments to U.S. territories for the cost of the expanded Child Tax Credit, although the advance payments of the credit don’t apply. 

For tax years after 2021, residents of Puerto Rico would be able to claim the refundable portion of the child tax credit even if they don’t have three or more qualifying children.  

How long will this new Child Tax Credit be in place?

The American Rescue Plan only guarantees the increased amounts for the 2021 tax year, so unless Congress makes them permanent, they will revert in 2022 to the previous rules of $2,000 per child with up to $1,600 of that amount being refundable. Likewise, the advance payments will only apply to 2021.

Additional questions about the new Child Tax Credit

As more details become available about the new Child Tax Credit and the advance payments, we understand that you’ll have more questions. H&R Block is committed to helping you understand the changes that affect your finances and will continue to update this page as we learn more.

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