SAN ANTONIO – The Internal Revenue Service is about to start sending money to qualifying families for the advance child tax credit payments rollout.
Thanks to the American Rescue Plan Act, families who qualify will receive advance payments of their 2021 child tax credit. A total of six payments will be sent to qualifying families in the form of monthly checks or direct deposits from July to December.
Some families, however, have been waiting for the IRS to create a portal that allows them to opt-out of the advance payments, and instead receive their full credit during next year’s tax season.
Families are automatically enrolled for the advance payments and must unenroll if they don’t want to receive the monthly payments. You can find the tool to unenroll here.
The advance payments will start going out July 15 and will amount to half the total child tax credit a family is due to receive for the 2021 tax year.
This means that families will receive up to $300 a month from July to December for each qualifying child under age 6, for a total of $1,800. The other $1,800 will be included in a family’s 2021 taxes. Families with children ages 6-17 will get up to $250 a month.
The credit will include children who turn 17-years-old in 2021 and is fully refundable, meaning taxpayers who don’t owe income tax or have any earned income can still benefit from the child tax credit.
Payments will be estimated from information found in eligible taxpayers’ 2020 tax returns. 2019 tax returns will be used to determine payments if a family’s 2020 taxes have not yet been filed.
Tax credits will be reduced for families with incomes over $150,000 for married taxpayers filing a joint return and qualifying widows or widowers, $112,500 for heads of household, and $75,000 for all other taxpayers.
Many parents who have had children in 2021 have been left wondering if they will qualify for the payments since they didn’t claim a new dependent on their 2020 tax returns. The IRS still hasn’t given a specific date for when dependent updates can be made on the website but it notes that the option to make changes to dependents will be coming in “late summer.”
Also in late summer, the IRS says there will be an option to re-enroll in the advance child tax credit payments if you have previously unenrolled.