Advance Child Tax Credit


Advance Child Tax Credit: The IRS created a Child Tax Credit Update Portal, it is a password-protected tool available to everyone with internet access from any device. You may check on your eligibility, payment status, or unenroll from this benefit. If you have an existing IRS account, you may use the same login credentials.

For 2021 only, taxpayers can claim half of the child tax credit in monthly installments from July – December. The second half will be claimed when you file your 2021 income tax return.

In order to qualify, taxpayers must satisfy the following requirements:

  1. Filed a 2019 or 2020 tax return and claimed the Child Tax Credit on the return; or given the IRS your information in 2020 to receive the Economic Impact Payment using the Non-Filers tool;
  2. Have a main home in the United States for more than half the year (All 50 states and the District of Columbia) or file a joint return with a spouse who has a main home in the United States for more than half the year;
  3. A qualifying child who is under age 18 at the end of 2021 and who has a valid Social Security number;
  4. Made less than certain income limits.

If you meet the requirements, the IRS will automatically enroll you and there is nothing you need to do. If you are eligible, be on the lookout for your personalized letter informing you of your monthly advance payment.

These advance payments begin to be reduced if your modified Adjusted Gross Income (AGI) exceeds:

  • $150,000 if married and filing a joint return or filing as a qualifying widow or widower;
  • $112,500 if filing as head of household;
  • $75,000 if you are a single filer or married and filing a separate return.

The credit will begin to phase out $50 for every $1,000 over these thresholds.

  • For each qualifying child under age 6, you will receive up to $1,800 in advance. This is generally paid in six monthly payments of $300.
  • For each qualifying child ages 6 through 17, you will receive up to $1,500 in advance. This is generally paid in six monthly payments of $250.

Please note, if your income has increased in 2021, you may want to consider using the IRS portal to update your income information. Excess money received by a taxpayer will need to be returned on the taxpayer’s 2021 tax return.  Even after payments begin, taxpayers can stop all future monthly payments if they choose, simply visit Child Tax Credit Update Portal.

Do expect SCAMS related to the Advanced Child Tax Credit

Bank account information should be updated only in the site and avoid clicking on links received by email, text or phone. If you need to update your bank account information, make sure to update your bank account information or unenroll if necessary, by Aug. 2 Any updates will apply to the Aug. 13 and future payments for this year.

Please contact us if you have any questions. C

CAPATA is a full-service accounting firm located in Laguna Niguel in southern California.