2021 Monthly Advance Child Tax Credit Payments Q & A.

July 18, 2021

Taxpayers who were eligible to claim Child Tax Credits when they filed their 2019 or 2020 tax returns started receiving Advance Child Tax Credit payments for the 2021 tax year on July 15, 2021.

Under the American Rescue Plan, the Child Tax Credit amounts have increased for the 2021 tax year to:

  • Up to $3,600 for each qualifying child under 6 years-of-age
  • Up to $3,000 for each qualifying child between 6 and 17 years-of-age

The amount of the monthly Advance Child Tax Credit payments are based on your income and the ages of your children on December 31, 2021.

We have received many calls with questions and concerns about the Advance Child Tax Credit payments. We have provided answers to some of their questions below along with links to more information.

However, the bottom line is –
It’s complicated and we are available to assist you in determining how the Advance Child Tax Credit may impact you.

Our tax experts are here to help you
Monday – Friday 9:00 AM – 6:00 PM
Saturday 9:00 AM – 4:00 PM

(317) 897-9964

 

Are these payments extra money like the stimulus checks I received?

No. They are advance payments. Instead of receiving the full amount of Child Tax Credits in a lump sum when eligible taxpayers file their 2021 tax return in 2022, the IRS is making these monthly payments in advance – thus reducing the amount of the tax refunds upon filing.

Learn More: Child Tax Credit: Who’s Eligible for IRS Payments This Week? | Money

Will I have to pay the money back?

Possibly. If there have been any changes to your filing status, income or number of children since you last filed a tax return, you may have to pay the IRS back for any overpayments you receive.

Learn More: https://www.irs.gov/credits-deductions/2021-child-tax-credit-and-advance-child-tax-credit-payments-topic-h-reconciling-your-advance-child-tax-credit-payments-on-your-2021-tax-return

What if I didn’t earn enough to file a tax return for 2019 or 2020?

You may still qualify for Child Tax Credits. Prior to 2021, people with low or no income were not eligible to receive Child Tax Credits. The American Rescue Plan has eliminated the earnings requirement so even people who don’t make enough money to file a tax return qualify to receive Child Tax Credits.

Learn More: Child Tax Credit Non-filer Sign-up Tool | Internal Revenue Service (irs.gov)

I didn’t opt out of the monthly payments by June 28th. Can I still opt out?

Yes, you can opt out at any time. The deadline to unenroll for the August payment is August 2nd.

Learn More: Child Tax Credit Update Portal | Internal Revenue Service (irs.gov)

Under what circumstances should I opt out of the monthly payments?

There are many reasons why it might be beneficial for you in the long run to opt out of the monthly payments now.

Learn More: Child Tax Credit 2021: Why Opt Out of Monthly Payments? | Money

I have a different bank account then I had when I filed my last tax return. Can I update my bank information with the IRS?

Yes – however, the IRS used the banking information they had on file at the time the July 15th payments went out. You’ll need to update your routing and account numbers by August 2nd for it to take effect by the August 13th deposit date. If you miss the August deadline you can still change your information for September and the following months.

Learn More: Child Tax Credit Update Portal | Internal Revenue Service (irs.gov)

My youngest child turned 18 earlier this year. I will not be claiming him for 2021. What do I need to do to stop the payments?

You can unenroll to stop the monthly payments. Unenroll by August 2nd for it to take effect before the August 13 payment.

Learn More: Child Tax Credit Update Portal | Internal Revenue Service (irs.gov)

I have my direct deposit set up for my tax refund but I didn’t receive my July 15th payment. What should I do?

You can check to see if you are enrolled and if they have the correct banking information on line.

Learn More: Child Tax Credit Update Portal | Internal Revenue Service (irs.gov)

My husband and I are divorced. I claim our children every other year and he claims them the years I don’t. Will be both be getting the payments?

Probably not but, just in case, the parent who is not claiming them for 2021 should opt out online.

Learn More: https://www.irs.gov/credits-deductions/2021-child-tax-credit-and-advance-child-tax-credit-payments-topic-h-reconciling-your-advance-child-tax-credit-payments-on-your-2021-tax-return

My July payment went to the wrong bank account. What should I do?

Payments sent to wrong bank accounts will automatically kick back to the IRS and they will issue paper checks. You also need to update your banking information on the Child Tax Credit Update Portal at the link below by August 2nd so the August 13th payment, and future payments, will be deposited to the correct account.

Learn More: Child Tax Credit Update Portal | Internal Revenue Service (irs.gov)

 

You may have many more questions. We will be happy to assist you.

Our tax experts are here to help you
Monday – Friday 9:00 AM – 6:00 PM
Saturday 9:00 AM – 4:00 PM

(317) 897-9964