Come July 15 and your first monthly child tax credit check will be sent out. Your payment will be either $250 or $300 per kid if your family qualifies.
The good news is that the child tax credit this year is bigger and better! So, if you’re a family that took a financial hit during the Covid-19 pandemic, here’s your small saving grace. The American Rescue Plan Act of 2021 has significantly increased your credit amount for a whole year. Even better, the IRS has to make advance payments to qualifying families in the second half of 2021.
However, if you’re feeling overwhelmed by the facts and figures of the child tax credit, we’re here to help you navigate through the process of application. Are you eligible for the 2021 child tax credit? What’s the advance payment schedule like? We’ve got all the answers to all those questions.
Basics of child tax credit payment
First things first, know that you won’t get your child tax credit payments all at once in 2021.
Second, half of your total child tax credit payment will come this year through monthly payments. The other half will come in a lump sum as part of your tax refund in 2022.
So, to simply put, your largest payment arrives only next year. Till then, you are entitled to get six smaller payments this year to start using right away. But the idea is to bring you your money sooner, which is why the checks will start coming in 2021 as advance payments.
Does my income determine the payments?
Well, yes income does limit how much you will receive. But there is no limit on the number of children and you can receive credit for all of them as long as you’re eligible.
Single filers earning less than $75,000 per year and married couples earning less than $150,000 a year will be eligible for the full amount.
But the amount phases out for people with higher incomes. For every $1,000 of income that goes over threshold amounts, there will be a $50 deduction
How much money will I get per kid?
Now that you know that child tax credit payments will be divided between 2021 and 2022, let’s do the math. If you have a qualifying child of age 5 and younger, you will receive up to $1,800 in six $300 monthly payments this year. You will receive the remaining $1800 in lump sum next year.
For kids who qualify, between the ages of 6 and 17, you will receive up to $1,500 in six $250 monthly payments this year.
Now coming to the grown-ups—the older teens. If you have a dependent who is 18 years old, they qualify for $500 each. Dependents over 19 and till age 24 qualify if they have enrolled in college full time.
Does my newborn baby qualify me for payment?
Yes, if you had your baby in 2021, then your newborn is counted eligible toward the child tax credit payment of $3,600.
Children who are adopted also qualify if they’re US citizens. You’ll be able to update the IRS on a new dependent once that aspect of the updated portal is available.