Advance Payments for Child Tax Credit Start in July

Starting this summer, many families will receive advance payments of the Child Tax Credit (CTC). Under the American Rescue Plan Act (ARPA), the CTC has been expanded for tax year 2021 only. 

The total credit amount will increase for many taxpayers. Families eligible will receive a credit:

• up to $3,000 per qualifying child between the ages of 6 and 17 
• up to $3,600 per qualifying child under the age of 6

Each child's age is determined at the end of 2021 and will include children who turn 17 in 2021. 

The credit is fully refundable, meaning taxpayers who don't owe any income taxes or don't have earned income will benefit. 

The increased tax credits are reduced based on income. 

• Married filing joint and qualifying widows/widowers with incomes over $150,000
• Heads of household with incomes over $112,500
• Other taxpayers with incomes over $75,000

Eligible families who have a primary residence in the US for more than half the year will receive advance payments from July through December. The amount of advance payments will be up to 50% and will be either based on actual 2020 tax returns or an estimation based on 2019 tax returns. Families should file their 2020 returns as soon as possible to make sure they are eligible for the tax credit based on 2020 income.

Helpful links for more information: 

IRS - Advance Child Tax Credit Payments in 2021

MSN Q&A - Child tax credit timeline: Here's when your monthly payments will arrive

Forbes - Tax Credit Calculator