Everything to know about your August child tax credit payment and beyond

You can nonetheless choose out or replace your banking data earlier than the Sept. 15 payment. 

Sarah Tew/CNET

The IRS has issued its second month-to-month child tax credit payment to tens of millions of eligible households throughout the US. Those who qualify ought to’ve acquired their cash via direct deposit or mail (up to $300 every month for every child beneath age 6, and up to $250 a month for every child 6 to 17) on or round Aug. 13.

Yet, this month’s advance credit is not with out the same old hiccups. Around 15% of households that acquired final month’s payment by direct deposit can be mailed paper checks due to a technical problem that must be resolved earlier than September funds exit. Some households may additionally be seeing completely different quantities this time round due to an adjustment from a lacking July verify. And some mother and father are nonetheless questioning if they need to opt out of the month-to-month checks, particularly these with sophisticated tax conditions or inconsistent incomes who need to keep away from any tax complications within the spring.

This yr, qualifying families get half of the whole credit via these month-to-month installments to assist with fast bills. The different half is available in one payout in 2022.

Below, we’ll reply some frequent questions about the child tax credit and how this yr’s advance funds might affect your taxes. And we’ll let you know how to handle your family particulars via the web IRS portals. If you are still ready on July’s payment or obtained much less cash than anticipated, here is what would possibly be happening with your money. You also can use CNET’s calculator to verify how a lot cash your household must be receiving. This story is up to date on a frequent foundation. 

When do advance child tax credit funds come this yr?

You will not get all the child tax credit cash this yr. You’ll get half of the cash in month-to-month funds, and the remainder in 2022 if you file your taxes, until you inform the IRS you need to unenroll from the advance funds to get one lump sum subsequent yr. 

So in different phrases, your largest payment arrives subsequent yr — up to $1,800 per child. Until then, you get six smaller funds in whole this yr to begin utilizing immediately. The thought is to convey you cash sooner to meet bills like lease, meals and daycare, which is why the checks are “advance payments.” The second verify was issued Friday, Aug. 13, and the following verify comes Sept. 15.

Child tax credit payment schedule

Monthly Maximum payment per child 5 and youthful Maximum payment per child; 6 to 17
July 15: First 2021 verify $300 $250
Aug. 13 $300 $250
Sept. 15 $300 $250
Oct. 15 $300 $250
Nov. 15 $300 $250
Dec. 15: Last 2021 verify $300 $250
April 2022: Second half of payment $1,800 $1,500

How a lot cash ought to I be getting in month-to-month checks?

How the child tax credit funds can be divided between 2021 and 2022 may be complicated. For every qualifying child age 5 and youthful, up to $1,800 (half the whole) will are available in six $300 month-to-month funds this yr. For every child between the ages of 6 and 17, up to $1,500 will come as $250 month-to-month funds six occasions this yr. 

The IRS bases your child’s eligibility on their age on Dec. 31, 2021, so a 5-year-old turning 6 in 2021 will qualify for a most of $250 per thirty days. For each age teams, the remainder of the payment will include your 2021 tax refund if you declare the rest of the credit in 2022. 

If you’ve got a dependent who is eighteen years outdated, they will qualify for $500 every. Dependents between the ages of 19 and 24 might qualify as effectively, however they have to be enrolled in faculty full time. Here’s extra on the financial details for qualified dependents

How does my earnings have an effect on the quantity of the credit this yr? 

Income limits decide how a lot you’ll obtain and when you even qualify, although there isn’t any restrict on the variety of youngsters you may obtain credit for so long as you are eligible. 

Single filers incomes lower than $75,000 per yr, heads of family incomes lower than $112,500 per yr and married {couples} incomes lower than $150,000 a yr can be eligible for the full quantity. 

The quantity you may get will then section out for higher incomes. Your child tax credit funds will section out by $50 for each $1,000 of earnings over these threshold quantities, in accordance to Joanna Powell, managing director and licensed monetary planner at CBIZ. In different phrases, your household may nonetheless obtain some cash above these earnings limits, nevertheless it will not be for the utmost payment. 

2021 child tax credit most funds

Ages 5 and youthful Up to $3,600, with half as $300 advance month-to-month funds
Ages 6 to 17 Up to $3,000, with half as $250 advance month-to-month funds
Age 18 $500 one-time verify
Ages 19 and 24, full-time faculty college students $500 one-time verify

Can I nonetheless choose out of the advance month-to-month funds? 

Advance funds are optionally available, and despite the fact that the vast majority of US households are eligible many nonetheless do not qualify. If you know your family state of affairs is altering considerably this yr, you might desire to choose out to keep away from repaying the IRS. The subsequent deadline to choose out of month-to-month funds is Aug. 30. You can use the IRS Child Tax Credit Update Portal on-line anytime between now and December to unenroll. You might want to unenroll when you do not meet earnings or different eligibility necessities. 

To cease advance checks, the IRS says you could unenroll three days earlier than the primary Thursday of the next month. See the chart under for deadlines. Once you unenroll on this yr’s advance funds, you may’t but reenroll, although the IRS says it should make that choice out there later. Also word that for {couples} who’re married and submitting collectively, every mum or dad should unenroll individually. 

Child tax credit payment unenrollment dates

Payment month Unenrollment deadline Payment date
July June 28 July 15
August Aug. 2 Aug. 13
September Aug. 30 Sept. 15
October Oct. 4 Oct. 15
November Nov. 1 Nov. 15
December Nov. 29 Dec. 15

What if my child tax credit payment remains to be delayed?

One factor to have in mind is that the IRS is concentrating on the payment dates (see above). If you’ve got direct deposit arrange with the IRS, you would possibly see a pending payment earlier than the precise deadline. That means you won’t find a way to entry the cash immediately, however that it is in course of.

It may take longer for your payment to arrive when you’re receiving the verify by mail. Many households who had been anticipating to see their August payment come by direct deposit can be getting a paper verify as an alternative this month. If sufficient time has handed and you are involved there could also be an issue, you should utilize the IRS Update Portal to right your direct deposit data. You also can file an IRS payment hint when you’re apprehensive. Check right here for extra information about missing payments

Will I owe cash to the IRS if I settle for the advance funds?

If you are eligible for advance funds and select to get the additional money this yr, you may obtain the second half of your whole on your taxes subsequent yr. You’ll want to know the whole quantity of child tax credit cash acquired in 2021 to examine it with how a lot you may declare. The IRS will ship a letter with your personalised estimate that you should utilize for your 2021 tax return. 

You might have to repay the IRS when you obtained greater than you had been supposed to. The IRS may problem an “overpayment” as a result of it’s basing your 2021 child tax credit quantity on older figures. If you are involved about this being the case, or when you’d desire to get the credit with your tax refund subsequent yr, you may choose out of early child tax credit funds and get the cash in a single lump sum in 2022. Here’s what to know about how the payments impact your tax refund subsequent yr.

How can I exploit the IRS child tax credit portals? 

This summer time, the IRS opened its child tax credit online portals. The first portal is for folks not normally required to file an earnings tax return, together with low-income households. And the Child Tax Credit Eligibility Assistant software — out there in English and now in Spanish — helps households rapidly decide whether or not they qualify. 

The Child Tax Credit Update Portal at the moment lets households see their eligibility, handle their funds and unenroll from the advance month-to-month funds. Parents also can replace their direct deposit data utilizing the portal. In the approaching months, it should permit households to replace different data if their circumstances modified — for instance, if a brand new child has arrived or will arrive in 2021 and is not mirrored on your 2020 tax return. You’ll additionally find a way to replace your mailing tackle, marital standing, earnings or dependents to have probably the most up-to-date eligibility data. 

This helpful PDF additionally describes what the portals do. 

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Can my newborn qualify for advance payments this year? 

If you have a baby in 2021, your newborn will count toward the child tax credit payment of $3,600. Children who are adopted can also qualify if they’re US citizens. You’ll be able to update the IRS on a new dependent once that aspect of the Update Portal is available. 

If I didn’t file my taxes can I still receive payments?

Payments will be automatic for those who filed their 2020 tax returns by the May 17 deadline (or those who claimed all dependents on a 2019 tax return). Parents who didn’t file taxes should use the new IRS tool, called the “Non-filer Sign-up tool,” to get their money, even if you’re not usually required to file. This will let the IRS know your income level and how many dependents are in your household who count toward the child tax credit benefits. You could also file a tax return to get the full monthly child tax credit payment you’re owed. 


Parents who get child tax credit money but don’t qualify may have to repay the IRS during tax time next year. 

Sarah Tew/CNET

What if I receive payments but I don’t qualify?

Since the IRS uses your 2019 or 2020 tax return, your family may not qualify for the child tax credit payment when you file your 2021 tax return in 2022. In this case, you may have to repay the IRS some or all of the credit. The child tax credit rules aren’t as flexible as the stimulus check rules regarding overpayment. One example of when this would happen is if you and the other parent of your child (who is not your spouse) were both paid for the child tax credit for the same dependent.

To avoid this tax inconvenience, make sure all your information is updated before the payments start arriving. The Update Portal will let you make adjustments in the coming months to verify your new income and marital status. 

What if I share custody of a child?

For the first two stimulus checks, some parents who shared custody of a child but weren’t married to each other were entitled to each claim money for the same child. That was only if they alternated years for claiming the dependent — in other words, if one parent claimed the child on their taxes in odd years and the other claimed the child on their taxes in even years.

This is no longer allowed for the third check, and we’re told it won’t work that way for the child tax credit payments either. Here’s what we know so far about child tax credit and shared custody situations.

If the child switches homes this year, the parents will need to agree on who will claim the child on their taxes this year. The parent that claims the child and receives the child tax credit payments will need to fill out Form 8332 and include it with the tax return. If you don’t qualify or want to get the money in one lump sum, you can also opt out of early payments. Remember, if you’re not eligible but receive the money, you may have to pay the IRS back during tax time.

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