Theis set to bring a wave of cash to families with children of all ages, even up to 24 years old. However, the ins and outs of the CTC payments — including and which for how much money — are arguably even more complex than those of the . For example, while the counts each and for , the 2021 CTC has a sliding scale for parents (the higher , the less you get per child) and different maximum amounts per child.
The payment schedule is also hard to pin down, at least what we know of it so far. Some details are in the wording of thefrom March, including when advance payments can start and end. And did you also know that your CTC money will be split between 2021 and 2022? Other details will need to be set by the IRS and may not be resolved until after the .
We’ll share what we know about the child tax credit check delivery schedule right now, including how often payment could come, what to know about overpayment, how to correct any errors and what happens to your. If you’re , you can . Here are , and here’s the status of a potential . This story was recently updated.
Important fact: Child tax credit will be split between 2021 and 2022
The first thing to know is you won’t get your CTC payments all at once this year. As with your taxes, the child tax credit in the stimulus bill is for 2021. The “credit” part means the amount you owe in your taxes will be reduced by the “credit” you gain from your eligible dependents. That could either reduce your payment to the IRS for your 2021 taxes (filed in 2022) or else increase your. Normally, you’d receive that “credit” as a tax refund in 2022. But the plan is to bring you money sooner, which is why the checks will start coming in 2021 as “advance payments.”
This logic also explains why your 2021 child tax credit is split into two parts. The first part, in 2021, is the advance payment you can start using right away. The second part will apply to your 2021 taxes — which are filed in 2022. Yes, it’s confusing. Hopefully, we answer some of your questions below.
What parents sharing custody should know
For the first two stimulus checks, some parents whobut weren’t married to each other were entitled to each claim money for the same child. That was only if they alternated years for claiming the dependent. For example, one parent claimed the child on their taxes in odd years, and the other claimed the child on their taxes in even years.
This is no longer allowed in the third check, and we’re told it won’t be part of the CTC payments either. Here’s what we know so far about the.
How the child tax credit payments could play out this year
As a refresher, the amount you receive will be half of what you’re owed for the year under the, and you will receive the other half of the payment with your , filed in 2022.
If paid out monthly, the payments would be up to $300 per month for each qualifying child age 5 and under, and up to $250 per month for each child between the ages of 6 and 17. Note that this amount phases out for those with higher incomes — for single people earning more than $75,000 per year, heads of household earning more than $112,500 per year and married couples earning more than $150,000 a year.
So if you qualify for $3,000 and you have one dependent, you’d get an estimated $250 per month from July to December, for a total of $1,500. You then need to claim the rest of your child tax credit amount when you file your 2021 taxes next year (2022). Here’s more on the.
2021 child tax credit amount
|Age||Amount you could get per child|
|Age 5 and under||Up to $3,600, or $300 a month if monthly payouts occur|
|Ages 6-17||Up to $3,000, or $250 a month if monthly payouts occur|
When would the first CTC checks start to arrive?
We know a general timeline, but the specifics haven’t yet been pinned down. The agency said in a statement March 12.stipulates that CTC payments will start to arrive in July, but a specific date hasn’t been released. The IRS will make additional information about the expanded child tax credit available “as soon as possible,” the
What else do we know about the child tax credit payment delivery schedule?
The child tax credit will be paid out “periodically,” according to the text of the stimulus bill, from July through December. The IRS hasn’t shared how often it will be able to get the checks out, though.
Monthly delivery has been a goal and was in the initial language used in earlier drafts of the stimulus bill. But the language changed to “periodically,” maybe in part because of the extra burden placed on the IRS to also distribute tax returns and stimulus checks. In other words, some may have felt a monthly delivery cycle was too ambitious or unrealistic.
“It might be a challenge to get into the monthly right out of the box,” IRS Commissioner Charles Rettig said when asked about the timeline.
How would the IRS send your CTC money: Direct deposit, mail, some other way?
The way your CTC money arrives could very well depend on CBIZ, told CNET. The IRS has changed this in the past, so we’ll need to hear official guidance from the agency., Joanna Powell, managing director and certified financial planner at
For example, if you gotvia in your bank account, it’s quite possible your child tax credit could arrive that way, too. If you receive , it’s possible you might get your payment on a Direct Express card. might also have a different delivery method.
Paper checks andare other delivery methods used for stimulus checks. We’ll keep our ear to the ground for emerging details and will provide updates as we learn more.
How filing your 2020 taxes could affect your child tax credit total
Taxpayers said March 12. Rettig said payments will be automatic for those who , the new tax deadline.related to the new legislation and shouldn’t take any other “unnecessary steps,” the IRS
However,to get the credit, even if they don’t usually submit tax returns. This will let the IRS know how many dependents are in the household who count toward the CTC benefits.
An IRS portal is coming by July. Here’s what that means for CTC recipients
The IRS will launch an online portal by July 1, Rettig said, but the IRS won’t have the resources to build this until . Once the CTC portal is available, recipients can log in to update their information if their circumstances have changed. For example, if you have a child in 2021, the IRS wouldn’t have that information on file yet, so updating those details may help you get a larger tax credit payout.
Would you have to return money to the IRS if you get more than you should?
Yes. The CTC isn’t as flexible as the. If you receive more money than you should have, you will have to pay it back. One example of this happening is if you and the other parent of your child (who is not your spouse) are .
When you file your 2021 tax return (in 2022), if your tax situation isn’t what the IRS has in its system and you weren’t entitled to as much as you received, you’ll have to give the overpayment back. To avoid this tax inconvenience, make sure all your information is updated before the payments start arriving. Powell estimates the portal will be open ahead of time so you can make any necessary adjustments.
Can you opt for the whole CTC bundle at once, instead of several smaller checks?
Yes, but not this year. If you thought you could cash in on all the CTC money in July, that’s not the case. Instead, you can opt out of getting the periodic advance payments and receive a lump sum in spring 2022 as a credit when you file your taxes. That means you’d get a larger total in your tax refund or owe the IRS less money because the credit would be deducted from your total.
You’ll be able to use the online portal to opt out. Again, you wouldn’t receive any money until 2022.
What happens after the 2021 CTC advance payments end in December?
The final advance payment of the child tax credit is scheduled to end by Dec. 31, 2021, with the rest coming in 2022 with tax season. But Biden wants to make the higher payments permanent, White House Press Secretary Jen Psaki said March 16: “We’re having those discussions with Congress.”
For more information, here are the. Plus, here’s and how to track .