Child Tax Credit
Frequently Asked Questions
The newly expanded Child Tax Credit was for the first time ever, distributed in advanced monthly payments. Due to these changes, many families 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. Families received half of this benefit as advanced monthly payments from July to December 2021. The other half will be received when they file their 2021 income tax return in 2022.
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.
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.
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.
Via the White House
What if I am not employed right now? Can I still receive the CTC?
Yes. You still qualify 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.
How does the IRS determine which parents receive the Child Tax Credit in mixed-custody households?
If you did not receive advance monthly Child Tax Credit payments in 2021, you may still be entitled to the full amount of the credit. Even if someone else received payments for the child in 2021, if the qualifying child lived with you for most of 2021 (link needed) then you may be eligible to claim the full amount of the credit.
The IRS estimated and directed monthly payments based on 2019 and 2020 tax information that may not have accurately reflected circumstances in 2021. If someone else rightfully claimed a child on their 2019 or 2020 taxes who is a qualifying child for you in 2021, they may have received monthly Child Tax Credit payments based on those previous years’ claims. However, this will not impact the amount of benefit you are eligible to claim for the Child Tax Credit in 2021.
If you rightfully claim a qualifying child for purposes of the Child Tax Credit in 2021, then you will receive the full amount of the Child Tax Credit for which you are eligible, even if someone else received advance payments for that child in 2021.
Why have monthly Child Tax Credit payments stopped?
The American Rescue Plan increased the Child Tax Credit to $3,600 for qualifying children under 6 and $3,000 for qualifying children 6-17. It also provided monthly payments from July of 2021 to December of 2021. President Biden has proposed extending the enhanced Child Tax Credit including monthly payments for at least 2022. Families will receive the entire 2021 Child Tax Credit that they are eligible for when they file in 2022. However, continuing enhanced benefits and monthly payments would require new legislation to be passed in 2022.
FAQs were last updated on Monday, January 31, 2022 at 3pm ET/12pm PT