The American Rescue Plan Act of 2021 provides for a portion of the Child Tax Credit to be pre-paid in six monthly payments beginning July 15th and continuing through December 15th.
Eligible families will begin receiving up to $300 per month for each child under age six, and up to $250 per month for each child age six and over. Payments will be made through direct deposit, paper check, and debit cards.
In order to qualify for the maximum Child Tax Credit, your 2021 modified adjusted gross income (MAGI) must be:
*$75,000 or less for Single filers
*$112,500 or less for Heads of Household filers
*$150,000 or less for Married Jointly & Qualified widow or widower
Unlike the recent Economic Impact Payments (Stimulus) payments, if you receive more Child Tax Credit than you are eligible for on your 2021 tax return, you will be required to repay the excess!
If you expect your 2021 income to exceed the amounts above, or if you usually owe federal income tax when you file your tax return, you may want to opt out of the advance payments. If you opt out and then meet the requirement for the maximum credit in 2021, you can claim those funds on your 2021 tax return. If you are married and filing a joint return, both spouses must opt out.
In order to opt out, visit the IRS Advance Child Tax Credit page here: https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021.
