The 2021 Child Tax Credit Update – Important changes to the Child Tax Credit (CTC) will help many families get advance payments of the Child Tax Credit starting in the summer of 2021.
Half the total credit amount will be paid in advance monthly, and you will claim the other half when you file your 2021 income tax return. The IRS will issue the first advance payment on July 15, 2021.
The new “Child Tax Credit Update Portal” allows parents to view their eligibility, view their expected CTC advance payments, and if they wish to do so, opt-out from receiving advance payments. Opting out may be desirable if, for instance, taxpayers expect the amount of tax they owe to be greater than their CTC refund when they file their 2021 tax return.
Any amounts paid that you are not entitled to (I.e., made more in 2021 than 2020 or your child becomes ineligible (i.e., age)) some or all will have to be paid pack when you file your 2021 tax return.
Here are the top 5 Frequently Asked Questions related to the credit:
1. If I’m eligible to receive advance Child Tax Credit payments, when will I start receiving payments?
Advance Child Tax Credit payments will be disbursed in monthly installments starting July 15, 2021, through December 2021. More details about when you should expect to receive advance Child Tax Credit payments will be provided soon.
Payment Month Payment Date
2. How will I receive my advance Child Tax Credit payments?
If the IRS has received your banking information, your payment will be sent to you as a direct deposit. They will use bank account information from the following sources, in the following order:
• Your 2020 tax return.
• Your 2019 tax return, including information you entered into the Non-Filer tool on IRS.gov in 2020.
• Information you entered on Get My Payment in 2020.
• A federal agency that provides you benefits, such as Social Security Administration, Department of Veterans Affairs, or the Railroad Retirement Board.
If they do not have bank account information to issue you a direct deposit, you will be sent your advance Child Tax Credit payments by mail.
3. I recently filed my 2020 tax return. Do I need to do anything else to receive the advance Child Tax Credit payments?
No. You do not need to take additional action beyond filing your 2020 tax return to receive the monthly payments.
If you already received one or more payments based on your 2019 tax return, your payment amount may change after we process your 2020 tax return. Otherwise, your monthly payments should begin in July or the month after your 2020 tax return is processed, whichever is later.
4. My 2019 tax return was used to determine my advance Child Tax Credit payments. I recently filed my 2020 tax return with a different amount of income. Will the IRS update my advance Child Tax Credit payment amounts?
Yes. Your advance Child Tax Credit payments will be recalculated after the IRS processes your 2020 tax return. We will adjust your remaining payments in 2021 to increase or decrease the total amount of your advance Child Tax Credit payments that should be disbursed to you during 2021.
5. Do I need to file an amended return to receive advance Child Tax Credit payments?
No. You’re not required to file an amended return to receive advance Child Tax Credit payments. As provided in this Topic E, if the IRS has not processed your 2020 tax return as of the payment determination date for a monthly advance Child Tax Credit payment, we will determine the amount of that advance Child Tax Credit payment based on information shown on your 2019 tax return.
What You Need
If you don’t have an existing IRS username or ID.me account, have your photo identification ready.