The expanded $3,600 child tax credit will begin disbursement on July 15. Depending on eligibility, families with qualifying dependents could receive up to $300 per month for each child under age 6 (even newborns), or $250 per month for each older child, with the other half of the credit paid out with next year’s tax refund. The 2021 child tax credit was enacted as part of the same stimulus bill that brought Americans the third stimulus check, but eligibility rules are not the same.
You don’t have to wait until July 15 to see if you qualify to receive the child tax credit (or to calculate how much you’re owed). The IRS announced this week that it’ll be sending out letters to more than 36 million families who qualify for the credit, with a second letter coming later with a personalized estimate of your monthly payments. In the meantime, use CNET’s child tax credit calculator to plan ahead.
Read on to determine if your child meets the new tax credit requirements. And families may also want to know how to claim up to $16,000 in child care expenses. Also, here’s how the next stimulus proposals could bring you money and what we know about a potential fourth stimulus check. This story has been updated.
$3,600 or $3,000 for each dependent age 17 and younger
If you have dependents who are 17 years of age or younger, they can each count toward the new child tax credit. However, the amount they’re eligible for depends on their age. Kids between the ages of 6 and 17 will count for up to $3,000 each. Kids who are under the age of 6 can count for up to $3,600 each.
Families won’t receive the full amount of the credit on July 15, but a partial one. The initial payment next month is an advance payment of either $250 or $300, depending on the age of the child (see chart below). The total of the 2021 monthly installments will equal half the amount of the credit, with the other half of the credit coming next year during tax time. You can see a timeline of the payments and more information here.
2021 child tax credit age brackets
|Ages 5 and younger||Up to $3,600 each child, with half of credit as $300 monthly payments|
|Ages 6 to 17||Up to $3,000 each child, with half of credit as $250 monthly payments|
|Age 18||$500 onetime check in 2022|
|Ages 19 to 24, full-time college students||$500 onetime check in 2022|
Smaller, single payments in 2022 for dependents age 18 to 24
If you have 18-year-old dependents, they can qualify for up to $500 each toward the child tax credit amount you’ll receive. If you have a dependent between the age of 19 and 24 who is attending college full-time, they can also qualify for up to $500 each toward your total payment, per the March stimulus package. That payment will come when you file your taxes in 2022.
Babies born this year qualify for up to $3,600 each
If you’re expecting your baby to arrive before the end of 2021, the newborn will also qualify for up to $3,600. This includes children who are adopted, assuming they’re US citizens (more below). You’ll be able to use the IRS portal once it’s available to update your information to add your new family member or you can claim the tax credit when you file your 2021 tax return next year, according to Garrett Watson, a senior policy analyst at Tax Foundation. The IRS says both portals will open by July 1.
Eligibility info for kids with disabilities
Children with disabilities can qualify for the child and dependent care credit separately from the child tax credit, Watson said. You may be able to claim this credit if you paid expenses for the care of a qualifying dependent to enable you to work, per the IRS. Watson says the child tax credit would apply similarly to children with disabilities.
Eligibility info for parents with shared custody
“Double-dipping” benefits for the same child worked for the first two stimulus checks, where a loophole entitled unmarried parents who share custody to both claim the child as a dependent in a specific situation. That isn’t the case with the 2021 child tax credit. In fact, overpayment could result in you being asked to return the money to the IRS.
Dependents must be in your care at least half the year
If you’re claiming the new child tax credit for your child, note that the child must live with you at least six months out of the year. There are exceptions to this rule, though, including temporary absences. According to the IRS, “A person is considered to have lived with you during periods of time when one of you, or both, are temporarily absent due to special circumstances,” including illness, education, business, vacation and military service.
Also, a newborn child born later in 2021 is included in the exception and will be considered as living with you for the entire year. However, the IRS will be working off the 2020 tax return, which will not have children born in 2021 listed, according to Joanna Powell, certified financial planner and managing director at CBIZ, so remember to update your information in the portal.
More rules for your dependents
If your child isn’t a US citizen and doesn’t have a Social Security number, there’s no way around this one: They don’t qualify. When you file your individual income tax return (Form 1040), you’re required to list your dependents and their Social Security numbers when you’re claiming them for the child tax credit.
This includes adopted children. An adopted child who isn’t a US citizen and has an ATIN or ITIN (adopted/individual taxpayer identification number) won’t qualify for the child tax credit, per the IRS. “The child must have an SSN to be a qualifying child eligible for the child tax credit.”
This is unlike the third stimulus check, where mixed-status households could receive a check and only one member of the household needed to have a Social Security number.
Here’s more information about the 2021 child tax credit and details on qualifications for parents to receive the payments.