Eligible families will soon begin receiving advance payments of the 2021 Child Tax Credit, either by direct deposit or check. The payment will be up to $300 per month for each qualifying child under age 6, and up to $250 per month for each qualifying child ages 6 to 17. The IRS will issue the advance payments to eligible families on July 15th, August 13th, September 15th, October 15th, November 15th, and December 15th.
The 2021 Child Tax Credit is available to individuals with modified adjusted gross incomes (AGI) of:
$75,000 or less for those who file as single,
$112,500 or less for those who file as head of household, and
$150,000 or less for married couples filing a joint return and qualified widows/widowers.
The credit is reduced for income amounts above these thresholds. For eligibility purposes, individuals can quickly identify their modified AGI amount by checking Line 11 of their 2020 federal income tax return (Form 1040).
Recent Child Tax Credit Changes
The American Rescue Plan raised the maximum Child Tax Credit in 2021 to: (a) $3,600 for qualifying children under the age of 6, and (b) $3,000 per child for qualifying children between ages 6 and 17. Before 2021, the credit was worth up to $2,000 per eligible child, but children 17 years of age were not considered qualifying children for the credit.
In addition, the entire credit is now fully refundable. This means that eligible families may receive the entire value of the credit even if they do not owe any federal income tax. So, it is important for those individuals who do not normally file a tax return to strongly consider doing so to determine whether they qualify for this significant tax credit as well as any other refundable credits.
About the Author
Attorney Jordan D. Howlette is the President of MyTaxRights, LLC and the managing-member of JD Howlette Law, LLC, a civil litigation firm that represents individuals and businesses involved in tax disputes with the IRS, the United States Department of Justice (DOJ), and various state departments of revenue. A former trial attorney with the DOJ’s Tax Division, Jordan leverages his extensive background in tax litigation to educate others about their federal tax rights and responsibilities. Each tax season, Jordan also volunteers as a tax coach with the Center for the Advancement of Tax Equity, where he teaches others how to self-prepare and file their taxes through the non-profit's free tax clinics.