08/05/2021

Child tax credit for $3,000 or more: New monthly payment timeline and overpayments

Details on the child tax credit payments are still in the works, but money is expected to start going out in July. Here’s what we know.


Sarah Tew/CNET

If you’re eligible for the expanded child tax credit, your family can expect to start receiving payments this summer, and the rest of the money when you file your taxes in 2022. On Tuesday, IRS Commissioner Charles Rettig confirmed the payments will be monthly starting in July.

Aside from the income requirements you need to meet, your dependents also have requirements to meet. If all qualifications are met, you can receive up to $3,000 for older kids and $3,600 for younger ones. The IRS will likely give more details about the child tax credit payments, but we already know the broad outlines, including who qualifies for the payments and how much they could receive.

Keep reading for more details about the child tax credit delivery schedule, including how often payments could come, what to know about an overpayment, how to correct any errors and what happens to your CTC payment if you share custody of one or more children. If you’re waiting for your $1,400 check to arrive, you can track your payment here. Here are nine unusual stimulus check facts and what the story is now with student loan debt forgiveness. This story was recently updated.

Is there an official date yet for when the first child tax credit payment will be delivered?

We know the month it will arrive, 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 agency said in a statement March 12. See our chart below for the timeline.

Timeline for the CTC payments

Monthly
July 2021: First payment received in 2021
August 2021
September 2021
October 2021
November 2021
December 2021: Last payment received in 2021
April 2022: Completion of 2021 CTC payments

Remember the child tax credit will be split between 2021 and 2022

The first thing to know is you won’t get your child tax credit 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 tax refund for 2021. 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.


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Key details for parents who share custody

For the first two stimulus checks, some parents who shared custody of a child but 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 — in other words, if 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 for the third check, and we’re told it won’t work that way for the child tax credit payments either. Here’s what we know so far about the child tax credit and shared custody situations.

How the child tax credit payment amount will look this year

To reiterate, the amount you receive will be half of what you’re owed for the year under the new stimulus bill, and you will receive the other half of the payment with your 2021 tax refund, filed in 2022.

The payments will 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. Your child tax credit payments will begin to phase out by $50 for every $1,000 of income over those threshold amounts, according to Joanna Powell, managing director and certified financial planner at CBIZ.

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 financial breakdown for qualified dependents.

You can use our calculator to get an estimate of how much you could get.

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

What payment method will the IRS use to send your child tax credit money?

The way your child tax credit money arrives could very well depend on how you receive your stimulus check money, Powell told CNET. The IRS has changed this in the past, so we’ll need to hear official guidance from the agency. 

For example, if you got all three stimulus checks via direct deposit in your bank account, it’s quite possible your child tax credit could arrive that way, too. If you receive Social Security benefits like SSI or SSDI, it’s possible you might get your payment on a Direct Express card. Veterans who don’t normally pay taxes might also have a different delivery method. 

Paper checks and EIP debit cards are 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.


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How filing your 2020 taxes could impact the CTC amount you’ll get

Taxpayers shouldn’t file an amended return related to the new legislation and shouldn’t take any other “unnecessary steps,” the IRS said March 12. Rettig said payments will be automatic for those who file their 2020 tax returns by May 17, the new tax deadline.

However, nonfilers will need to file a 2020 tax return 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 child tax credit benefits.

The IRS CTC portal will open by July. Here’s what that means for everyone expecting payments

The IRS will launch an online portal by July 1, Rettig said, but the IRS won’t have the resources to build this until after tax filing season ends. Once the child tax credit 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.

022-cash-money-third-stimulus-checks-biden-federal-unemployment-1400-300-payments

It’s unclear if the payments will become permanent.


Sarah Tew/CNET

Will the IRS expect you to return money if you get more than you were supposed to?

Yes. The child tax credit isn’t as flexible as the stimulus check rules. 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 both paid for the child tax credit for the same dependent.

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 get the full child credit payment at once, instead of smaller monthly payments?

Yes, but not this year. If you thought you could cash in on all the child tax credit money in July, that’s not the case. Instead, you can opt out of getting the monthly 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 you can expect when the new child tax credit monthly payments finish 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 President Joe 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 top things you should know about the $3,600 child tax credit for 2021. Plus, here’s how to track your tax refund and how to track your $1,400 stimulus check