Child Tax Credit
Frequently Asked Questions
The newly expanded Child Tax Credit is for the first time ever, being distributed in advanced monthly payments. Due to these changes, many families will have questions about what the Child Tax Credit means to them and how to ensure they receive it. Use the following FAQ guide to help answer any questions you might have about the expanded CTC.
What is the Child Tax Credit?
The expanded Child Tax Credit is a benefit given to help qualifying families with children. This year, families will be able to receive half of this benefit as advanced monthly payments starting July 15th. The other half will be received when they file their 2021 income tax return in 2022.
When and how will I start receiving my monthly payments?
Payments began going out in July, eligible families will receive direct deposit installments on the 15th of each month through December 2021. You will receive half of the credit in those monthly installments, and the second half when you file your 2021 tax return in 2022. If you haven’t provided the IRS with your bank account information on a recent tax return, a check will be sent out to you around the same time to the address the IRS has for you.
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Will this money be taxed?
No. Advance Child Tax Credit payments are not income and will not be reported as income on your 2021 tax return.
Can I get this money even if I owe taxes?
Yes. Child Tax Credit payments will not be reduced if you owe taxes from previous years.
Will I have to pay this money back?
Congress enacted a repayment protection for families with lower incomes if the IRS overpays you. If your 2021 income is less than $40,000 ($60,000 for married couples and $50,000 for heads of households), you are not required to repay anything back.
This protection only applies if you are overpaid because there are changes to the number of children you claim, not changes in income. The protection amount gradually decreases as your income increases. If your 2021 income is $80,000 or above ($120,000 for married couples and $100,000 for heads of households), you are required to repay the full excess amount.
The best way to avoid repayment is to make sure your information is up to date using the IRS Update Portal.
Do I need to do anything to make sure I receive my payments?
Most families won’t have to do anything at all to receive the Child Tax Credit payments. If you filed taxes this year (your tax return for 2020), filed last year (your tax return for 2019), or if you signed up for Economic Impact Payments (commonly called “stimulus checks” or “stimmies”) using the IRS’s Non-Filer tool last year, you’re all set and the IRS will automatically send you monthly payments.
If you did not have to file your taxes this year or last year due to low income, and you did not register for Economic Impact Payments last year, you can still sign up for the Child Tax Credit payments. The good news is that through the IRS Sign-up Tool you can also apply for any Economic Impact Payments (“stimulus checks”) that you’re entitled to but may not have received yet.
If you are still uncertain about your eligibility for the Child Tax Credit, you can use the CTC Eligibility Assistant from the IRS.
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If any of my information has changed since filing my 2020 tax return (including bank account, mailing address, family status, or income), what should I do?
You can update this information through the IRS Update Portal.
Currently, you can:
- Provide or update your bank account information
- Update your mailing address
If your information significantly changed between 2020 and 2021, head to the IRS Website for more information on your specific situation.
I didn’t sign up in time to get a payment by July 15th, does this mean I will lose out on my benefits?
No. Everyone will receive the full Child Tax Credit benefits they are owed. If you sign up for monthly payments later in the year, your remaining monthly payments will be larger to reflect the payments you missed. If you do not sign-up in time for monthly payments in 2021, you will receive the full benefit when you file your tax return in 2022.
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My child is over the age of 17, but I still claim them as my dependent. Will I receive any money from the CTC for them?
The Child Tax Credit is only available for qualifying children 17 or under, but you may be able to claim the Credit for Other Dependents when you file taxes next year. That is a nonrefundable $500 maximum credit.
Are mixed immigration status families eligible for CTC payments?
Yes, mixed status families can still receive CTC payments as long as the qualifying child has a SSN. Parents may either have a SSN or an Individual Taxpayer Identification Number (ITIN) to claim the CTC.
If your child has an ITIN instead of a SSN, you may be able to claim the Credit for Other Dependents instead of the CTC when you file taxes next year.
For more information regarding your specific situation, visit our friends at The Center for Law and Policy.
If I sign up for the Child Tax Credit, will it affect my other government benefits (like SSI, SNAP, TANF, or WIC)?
No. Receiving Child Tax Credit payments is not considered income for any family. Therefore, it will not change the amount you receive in other Federal benefits. These Federal benefits include unemployment insurance, Medicaid, SNAP, SSI, SSDI, TANF, WIC, Section 8, or Public Housing.
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What if I am not employed right now? Can I still receive the CTC payments?
Yes. You still qualify to receive CTC payments.
I believe I was supposed to file taxes in 2020, but I missed the May 17th deadline. Can I still access the CTC benefits?
If you believe that your income in 2020 means you were required to file taxes, you should file your past due tax return now. You can still file a return to get monthly Child Tax Credit Payments in 2021, as well as other tax benefits or a refund you are eligible to claim. For help filing a past due return, visit the IRS website.
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A friend of mine received a letter from the IRS saying they likely qualify for the CTC, but I didn’t receive one. Does this mean I am not eligible to get CTC payments?
No, not receiving a letter does not mean that you are not eligible for the CTC. Most working families are eligible for the credit if they filed their 2020 tax return (filed in 2021).
There are a variety of reasons why you may not have received a letter even if you think you qualify for the credit, and you likely do not need to take any action to sign up for the CTC. You can use the Child Tax Credit Eligibility Assistant to confirm if you are eligible to receive CTC payments.
What if I do not have a bank account?
You can receive monthly Child Tax Credit payments even if you don’t have a bank account.
If you don’t have a bank account or don’t have a bank account on file with the IRS, checks will be mailed to the address on your 2020 tax return (filed in 2021). Reloadable prepaid debit cards or mobile payment apps with routing and account numbers may also be an option.
What if I do not have a permanent address?
If you do not have a permanent address, you can list a trusted address where you would like to temporarily receive your monthly checks, such as the address of a friend, relative, or trusted service provider like a shelter, drop-in day center, or transitional housing program.
My child’s other parent is receiving the advance Child Tax Credit payments even though I will be claiming the Child Tax Credit for our child on my 2021 tax return. Will I still be able to claim the full Child Tax Credit?
Yes, you will be able to claim the full amount of the Child Tax Credit for your child on your 2021 tax return even if the other parent is receiving advance Child Tax Credit payments. The other parent should unenroll from receiving advance payments, but their decision will not affect your ability to claim the Child Tax Credit.
Via IRS website
How does the IRS determine which parents receive the Child Tax Credit in mixed-custody households?
The IRS will determine who receives 2021 advance Child Tax Credit payments based on the information on your 2020 tax return, or your 2019 return if the IRS hasn’t processed your 2020 return. If you claimed the Child Tax Credit for your child on your 2020 return, then you will receive the advance Child Tax Credit payments.
If you will not be eligible to claim the Child Tax Credit on your 2021 tax return (the one due in April of 2022), you can go to the IRS website to unenroll from receiving monthly payments through the Child Tax Credit Update Portal.
What are some things I should consider when deciding whether I want to opt-out of the monthly payments?
The payments you receive are an advance of the Child Tax Credit that you would normally get when you file your 2021 tax return. You may want to unenroll from receiving advance Child Tax Credit payments for several reasons, including if you feel your circumstances might change enough to impact your tax return. This includes any changes in the number of your qualifying children, changes in your income, and changes in your filing status. By unenrolling, you can claim the accurate credit amount when you file your 2021 tax return and avoid owing any tax to the IRS.
Via IRS Website
I want to receive my full CTC payment when I file my 2021 taxes in 2022. How can I opt out of the monthly CTC payments?
You can opt out of monthly payments for any reason. To opt-out of the monthly payments, or unenroll, you can go to the Child Tax Credit Update Portal. You can also re-enroll through this portal before the end of the year. If you opt-out of monthly payments, you’ll get the full Child Tax Credit as a lump sum next year when you file your tax return.
FAQs were last updated on Monday, October 12, 2021 at 6pm ET/3pm PT