Child Tax Credit: IRS launches new tools for advance payments

The Internal Revenue Service has launched two new portals to help families manage and monitor payments from the Child Tax Credit.

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The Child Tax Credit Eligibility Assistant will help families determine whether they qualify for the advance credit that begins in July and continues through December.

The Child Tax Credit Update Portal will verify a family’s eligibility for the payments and allow those who do not want to get the advance payments to opt out from receiving the monthly payments so they can receive a lump sum when they file their tax return next year.

The American Rescue Plan Act, passed in March, increased the maximum Child Tax Credit amount in 2021 to $3,600 per child for children under the age of 6 and to $3,000 per child for children ages 6 through 17.

The credit is usually available only when a person files his or her income tax return.

Because of the COVID-19 pandemic, half of the credit is being sent in advance to help families who are eligible.

“IRS employees continue to work hard to help people receive this important credit,” IRS Commissioner Chuck Rettig said. “The Update Portal is a key piece among the three new tools now available on IRS.gov to help families understand, register for and monitor these payments. We will be working across the nation with partner groups to share information and help eligible people receive the advance payments.”

The advance Child Tax Credit payments will be made on the 15th of each month, except for August when it will come on the 13th. The payments begin on July 15.

According to a news release from the IRS, most families eligible for the payment will begin receiving them automatically without any further action required.

The IRS launched the Non-filer Sign-up Tool, last week, which helps families who do not usually file an income tax return to register for the Child Tax Credit.

The new maximum credit is available in full to taxpayers with a modified adjusted gross income (AGI) of:

  • $75,000 or less for singles,
  • $112,500 or less for heads of household and
  • $150,000 or less for married couples filing a joint return and qualified widows and widowers.

For most people, modified AGI is the amount shown on Line 11 of their 2020 Form 1040 or 1040-SR.

If your income is above these limits, the extra amount above the original $2,000 credit — either $1,000 or $1,600 per child — is reduced by $50 for every $1,000 in modified AGI.

In addition, the credit is fully refundable for 2021. This means that if you qualify for the credit, you can get the full amount even if you do not owe federal income tax.

If you have not filed a 2019 or 2020 tax return, you must do so by June 28 to be eligible to receive the first advance payment check on July 15.

If you do not have to file, make sure you enter your information using the Non-filer Sign-up Tool. This gives the IRS the information needed to send out payments.