The Child Tax Credit in the American Rescue Plan provides the largest Child Tax Credit ever and historic relief to the most working families ever – and as of July 15th, most families are automatically receiving monthly payments of $250 or $300 per child without having to take any action. The Child Tax Credit will help all families succeed.
The American Rescue Plan increased the Child Tax Credit from $2,000 per child to $3,000 per child for children over the age of six and from $2,000 to $3,600 for children under the age of six, and raised the age limit from 16 to 17. All working families will get the full credit if they make up to $150,000 for a couple or $112,500 for a family with a single parent (also called Head of Household).
Major tax relief for nearly all working families:
$3,000 to $3,600 per child for nearly all working families
The Child Tax Credit in the American Rescue Plan provides the largest child tax credit ever and historic relief to the most working families ever.
$3,000 per child 6-17 years old
$3,600 per child under 6 years old
All working families will get the full credit if they make up to $150,000 for a couple or $112,500 for a family with a single parent (also called Head of Household)
Automatic monthly payments for nearly all working families
If you’ve filed tax returns for 2019 or 2020, or if you signed up to receive a stimulus check from the Internal Revenue Service, you will get this tax relief automatically. You do not need to sign up or take any action.
Advancing your tax relief: Normally, tax relief for the year only comes the following year when you file your taxes, no matter how much you need it now. This year, most families started getting the money in July.
Monthly payments starting in July: For the first time, people will receive the Child Tax Credit in monthly payments. For every child 6-17 years old, families will get $250 each month, and for every child under 6 years old, families will get $300 each month.
The 80% who get their refunds from the IRS through direct deposit will get these payments in their bank account on the 15th of every month until the end of 2021.
People who don’t use direct deposit will receive their payment by mail around the same time.
President Biden’s American Families Plan calls for extending this tax relief for years and years
The new Child Tax Credit enacted in the American Rescue Plan is only for 2021. That is why President Biden strongly believes that we should extend the new Child Tax Credit for years and years to come. That’s what he proposes in his American Families Plan.
Easy sign up for low-income families to reduce child poverty
If you didn’t make enough to be required to file taxes in 2020 or 2019, you can still get benefits.
Low-income families with children are eligible for this crucial tax relief – including those who have not made enough money to be required to file taxes.
See how the Child Tax Credit works for families like yours:
Jamie
Occupation: Teacher
Income: $55,000
Filing Status: Head of Household (Single Parent)
Dependents: 3 children over age 6
Jamie
Jamie filed a tax return this year claiming 3 children and will receive part of her payment now to help her pay for the expenses of raising her kids. She’ll receive the rest next spring.
Total Child Tax Credit: increased to $9,000 from $6,000 thanks to the American Rescue Plan ($3,000 for each child over age 6).
Receives $4,500 in 6 monthly installments of $750 between July and December.
Receives $4,500 after filing tax return next year.
Sam & Lee
Occupation: Bus Driver and Electrician
Income: $100,000
Filing Status: Married
Dependents: 2 children under age 6
Sam & Lee
Sam & Lee filed a tax return this year claiming 2 children and will receive part of their payment now to help her pay for the expenses of raising their kids. They’ll receive the rest next spring.
Total Child Tax Credit: increased to $7,200 from $4,000 thanks to the American Rescue Plan ($3,600 for each child under age 6).
Receives $3,600 in 6 monthly installments of $600 between July and December.
Receives $3,600 after filing tax return next year.
Alex & Casey
Occupation: Lawyer and Hospital Administrator
Income: $350,000
Filing Status: Married
Dependents: 2 children over age 6
Alex & Casey
Alex & Casey filed a tax return this year claiming 2 children and will receive part of their payment now to help them pay for the expenses of raising their kids. They’ll receive the rest next spring.
Total Child Tax Credit: $4,000. Their credit did not increase because their income is too high ($2,000 for each child over age 6).
Receives $2,000 in 6 monthly installments of $333 between July and December.
Receives $2,000 after filing tax return next year.
Tim & Theresa
Occupation: Home Health Aide and part-time Grocery Clerk
Income: $24,000
Filing Status: Do not file taxes; their income means they are not required to file
Dependents: 1 child under age 6
Tim & Theresa
Tim and Theresa chose not to file a tax return as their income did not require them to do so. To get their child tax credit, they must use the IRS Non-filers Sign-Up Tool. They will claim 1 child and will receive part of their payment now to help them pay for the expenses of raising their child. They’ll receive the rest next spring when they file taxes .
Total Child Tax Credit: increased to $3,600 from $1,400 thanks to the American Rescue Plan ($3,600 for their child under age 6).
Receives $1,800 in 6 monthly installments of $300 between July and December.
Receives $1,800 next spring when they file taxes.
Automatically enrolled for a third-round stimulus check of $4,200, and up to $4,700 by claiming the 2020 Recovery Rebate Credit.
Frequently Asked Questions about the Child Tax Credit:
Overview
The Child Tax Credit is a tax benefit to help families who are raising children.
The American Rescue Plan, signed into law on March 11, 2021, expanded the Child Tax Credit for 2021 to get more help to more families.
It has gone from $2,000 per child in 2020 to $3,600 for each child under age 6.
For each child ages 6 to 16, it’s increased from $2,000 to $3,000.
It also now makes 17-year-olds eligible for the $3,000 credit.
Previously, low-income families did not get the same amount or any of the Child Tax Credit. Under the American Rescue Plan, all families in need will get the full amount.
To get money to families sooner, the IRS began sending monthly payments (up to half of your total amount) this year, starting in July.
It will be broken up into monthly payments, which means payments of up to $300 per child under age 6 and $250 per child ages 6 to 17.
You’ll get the remainder of the credit when you file your taxes next year.
The American Rescue Plan enacted these historic changes to the Child Tax Credit for 2021 only. That is why President Biden and many others strongly believe that we should extend the increased Child Tax Credit for years and years to come. President Biden proposes that in his American Families Plan.
Who is eligible for the Child Tax Credit?
Nearly all families with kids qualify. Some income limitations apply. For example, only couples making less than $150,000 and single parents (also called Head of Household) making less than $112,500 will qualify for the additional 2021 Child Tax Credit amounts. Families with high incomes may receive a smaller credit or may not qualify for any credit at all. For more detail on the phase-outs for higher income families, see “How much will I receive in Child Tax Credit payments?”
Most families didn’t have to do anything to begin receiving the Child Tax Credit payments. If you filed taxes this year (your tax return for 2020), filed last year (your tax return for 2019), or if you signed up for Economic Impact Payments ( “stimulus checks”) using the IRS’s Non-Filer tool last year, the IRS is automatically sending you monthly payments.
If you did not have to file your taxes this year or last year, and you did not register for Economic Impact Payments last year, you can still sign up for the Child Tax Credit payments. The good news is that through the IRS Non-filer Sign-up Tool you can also apply for any Economic Impact Payments (“stimulus checks”) that you’re entitled to but may not have received yet.
Yes. If you haven’t filed taxes in a while and have not yet received the Economic Impact Payments (“stimulus checks”) that you were eligible for, you can use the Non-filer Sign-up Tool to apply for them whether or not you are also applying for Child Tax Credit payments. See “I haven’t filed taxes in a while. How can I receive this benefit?” to see if the Non-Filer Sign-up Tool is for you.
If you will not be eligible to claim the Child Tax Credit on your 2021 return (the one due in April of 2022), then you should go to the IRS website to opt out of receiving monthly payments using the Child Tax Credit Update Portal. Receiving monthly payments now could mean that you have to return those payments when you file your tax return next year. If things change again and you are entitled to the Child Tax Credit for 2021, you can claim the full amount on your tax return when you file next year.
Deposits for the Child Tax Credit are labeled as CHILDCTC in your bank account. Read more about CHILDCTC.
People who receive payments by direct deposit will get their first payment on July 15, 2021. After that, payments will go out on the 15th of every month. (In August the payment will go out on August 13th since the 15th falls on a weekend.) If you haven’t provided the IRS with your bank account information on a recent tax return, a check will be sent out to you around the same time to the address the IRS has for you.
Most families will receive the full amount: $3,600 for each child under age 6 and $3,000 for each child ages 6 to 17. To get money to families sooner, the IRS is sending families half of their 2021 Child Tax Credit as monthly payments of $300 per child under age 6 and $250 per child between the ages of 6 and 17.
This amount may vary by income. These people qualify for the full Child Tax Credit:
Married couples with income under $150,000
Families with a single parent (also called Head of Household) with income under $112,500
Everyone else with income under $75,000
These people qualify for at least $2,000 of Child Tax Credit, which comes out to $166 per child each month:
Married couples with income under $400,000
Families with a single parent (also called Head of Household) with income under $200,000
Everyone else with income under $200,000
Families with even higher incomes may receive smaller amounts or no credit at all.
The IRS sends your payments by direct deposit to the bank account they have on file. If they don’t have bank account information for you, a check will be mailed to you. If you receive your payment electronically, it will show up in your bank account labeled CHILDCTC.
You can add or change your bank account information through the IRS’s Child Tax Credit Update Portal. Due to processing times, changes might not be reflected immediately on your next payment.
Yes, you can opt out of monthly payments for any reason. To opt-out of the monthly payments, or unenroll, you can go to the IRS Child Tax Credit Update Portal. If you do choose not to receive any more monthly payments, you’ll get any remaining Child Tax Credit as a lump sum next year when you file your tax return.
What if I didn’t file taxes last year or the year before?
You may be eligible for Child Tax Credit payments even if you have not filed taxes recently. Not everyone is required to file taxes.
This year, Americans were only required to file taxes if they earned $24,800 as a married couple, $18,650 as a Head of Household, or $12,400 as a single filer. If you had total income in 2020 below those levels, you can sign up to receive monthly Child Tax Credit payments using a simple tool for non-filers available on the IRS’s website.
If you believe that your income in 2020 means you were required to file taxes, it’s not too late. You can still file a return to get monthly Child Tax Credit Payments in 2021, as well as other tax benefits or a refund you are eligible to claim. For help filing a past due return, visit the IRS website.
No. Everyone will receive the full Child Tax Credit benefits they are owed. If you sign up for monthly payments later in the year, your remaining monthly payments will be larger to reflect the payments you missed. If you do not sign-up in time for monthly payments in 2021, you will receive the full benefit when you file your tax return in 2022.
Will this affect other benefits I receive?
No. Receiving Child Tax Credit payments is not considered income for any family. Therefore, it will not change the amount you receive in other Federal benefits. These Federal benefits include unemployment insurance, Medicaid, SNAP, SSI, SSDI, TANF, WIC, Section 8, or Public Housing.
