New Maximum Child Tax Credit – when you can expect to receive payment
There’s been a lot of talk about an increase to the Child Tax Credit for the 2021 tax year and the government’s Advance Child Tax Credit. The American Rescue Plan has raised the maximum amount of the Child Tax Credit to $3,600 for children under the age of 6 and to $3,000 for each child between the ages of 6 and 17. And with the Advance Child Tax Credit, families can expect to see some of that money this year.
That news has families looking forward to receiving additional funds, but many are wondering what they have to do to receive the funds and wondering when the money will arrive.
Most families are already eligible
The good news is if you filed federal taxes in 2020 and you have children age 17 or younger, you don’t need to take any additional steps to ensure your family’s eligibility. The same is true if you didn’t file federal taxes in 2019 or 2020 but you did use the Internal Revenue Service (IRS) non-filers tool last year to register for Economic Impact Payments.
For those families who normally aren’t required to file an income tax return and who didn’t register for Economic Impact Payments last year, the Treasury Department and IRS released a new Non-filer Sign-up Tool to help families register for the Advance Child Tax Credit.
Payments will start arriving in July
Under the Advance Child Tax Credit plan, the IRS will send eligible families half of the total of the credit amount before the end of the year. These payments will be made in monthly installments beginning in July.
The advance monthly payments are scheduled for:
July 15 (Thursday)
August 13 (Friday)
September 15 (Wednesday)
October 15 (Friday)
November 15 (Monday)
December 15 (Wednesday)
Will the payments count as taxable income when filing taxes next year?
No. The payments are advance payments of the 2021 child tax credit so they are not taxable. Next year, families who receive the payments will claim the remaining half of the total for which they are eligible on their 2021 Form 1040.
For More Information
For additional information regarding the Child Tax Credit payments, visit the IRS website.