Advanced Child Tax Credit New in 2021, the Child Tax Credit has increased from $2,000 to $3,000 for each qualifying child between the ages of 6 and 17 and it increased to $3,600 for any qualifying child under the age of 6.
As part of The American Rescue Plan Act of 2021, many families will be automatically enrolled in a series of advance payments of the Child Tax Credit starting this summer. The IRS will pay 50% of the total credit amount in advance monthly payments. The remaining 50% will be available to you when you file your 2021 income tax return. Under this periodic payment plan you will receive 6 payments starting on July 15th and ending December 15th . This advance is only available in 2021.
The IRS will use your most recent tax return (2019 or 2020) to determine whether you qualify for the child tax credit and to calculate your monthly advance. If you were not required to file a 2019 or 2020 tax return and provided information to receive the Economic Impact Payment using the IRS Non-Filer’s Tool, your eligibility and payment amount will be calculated based on the information you provided.
The IRS added an online tool that allows you to check your eligibility, add or modify bank account information, or opt out of the advance payments.
If your eligibility changes over the course of the year, you could have to pay back any over-payments when you file your 2021 tax return. To opt out you will need to set up an account at ID.me using a valid Driver’s License or Passport.
If you elect to opt out, you will receive 100% of the credit when you file your 2021 tax return.
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