When to Expect That $3,600 in Child Tax Credit Checks

When to Expect That $3,600 in Child Tax Credit Checks
Photo: Rido (Shutterstock)

The IRS has confirmed that families can expect their 2021 child tax credit subsidy to begin paying out as advanced monthly payments in July, rather than next year as part of a tax return. The monthly payments have also increased from a maximum of $2,000 to up to $3,600 per child. Here’s what you can expect and how to qualify for this stimulus-boosted credit.

Why do monthly payments start in July?

The child tax credit is a tax benefit for families with children, and for 2021—as part of the American Rescue Act—these payments have increased to a maximum of $3,600 per child. Notably, it’s a refundable credit being paid out as monthly cash payment for six months, starting in July. However, when the bill passed, it wasn’t clear the IRS was equipped to process monthly payments at all. Yesterday, IRS Commissioner Charles Rettig confirmed to Congress that the agency is now prepared to send checks out this summer.

What that means is that families eligible for the child tax credit will receive six monthly payments in 2021, arriving from July through December. The second half of the total annual credit can be claimed when families file their 2021 tax returns in 2022.

How do I qualify?

Both eligibility and the amount you receive will depend on your household income for 2020 and the age of your kids. For the 2021 tax year, families qualify for a credit up to $3,600 for each child under the age of six and $3,000 for each child under the age of 18—an increase from the previous credit total of up to $2,000 per child under age 17. Kids who are 18 and also considered dependents, as well as full-time dependent college students between the ages of 19 and 24, also qualify, but only for $500, per CNET.

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These payments have built-in phase-outs, however, which means that you’ll get less of a pay out if your adjusted gross income for 2020 is more than $75,000 for single parents or $150,000 for a married couple filing jointly (you will lose $50 of credit per $1,000 of income above the threshold, per WSJ). To see how much you might qualify for under this threshold, check out this child tax benefit tax calculator (which for some reason doesn’t include estimates for kids over 17).

Per CNET, there are some other eligibility requirements, as well:

The child you’re claiming must live with you for at least six months out of the year.Both you and your child must be U.S. citizens.For married couples filing jointly, at least one spouse needs to have a Social Security number or an ITIN, Powell said.The child must also have a Social Security number—a child with only an ATIN won’t qualify (this includes adopted children.)Parents who share custody of a child cannot both receive the tax credit.

Lastly, since it’s a limited-time credit for the 2021 tax year, you’ll need to file a tax return for 2020, at least for now, as it’s currently the only way to prove to the IRS that your child is eligible to receive the credit.

The IRS will set up an online portal for income readjustments

These payments are technically an advance based on your projected income and the number of kids you have now, but both might change for you later in the year. For this reason, the American Rescue Plan requires the IRS to build an online portal where you can update your income, marital status, and the number of qualifying children. The portal, which is expected to launch on July 1, will issue and track payments as well as reconcile the payments with the taxpayer’s credit taken on the tax returns.

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