15/04/2021

Child tax credit for $3,600: How and when the payments will arrive, 1 main thing to know

Details on the child tax credit payments still aren’t set, but they’re expected to start in July. Here’s what we know right now.


Sarah Tew/CNET

Families with kids up to 24 years old could see a significant boost in money from the federal government over the next 12 months. Along with the $1,400 stimulus checks the IRS is sending now to over 130 million qualified adults and families (calculate your stimulus total), the $1.9 trillion American Rescue Plan has redefined the 2021 child tax credit (CTC), which could start benefitting families as soon as this summer.

There’s a lot we know about the child tax credit expansion, including who counts as a qualified child and what the income limit is for parents to receive the CTC of up to $3,600 per child. But there are also uncertainties that are yet to be decided by the IRS, including how you’ll be paid and how often those CTC checks arrive. The situation can also be confusing, with different rules for different dependent age groups (here’s what parents sharing custody should know), what happens if you’re overpaid and why payments are split between 2021 and 2022.

We don’t have every answer yet, because the details and timeline aren’t determined. With the IRS busy processing stimulus checks and tax returns at the same time, the child tax credit rollout is on the agency’s radar but likely won’t be resolved until after the new May 17 tax deadline is behind us. We’ll share what to think about now. If you’re waiting on your $1,400 check to arrive, you can track your payment here, and here’s the status of a fourth stimulus check. This article was recently updated.

Need to know: CTC payments will be split between 2021 and 2022

The first thing to know is that 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 would 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. We know, it’s confusing. Hopefully, we’ll be able to answer lingering questions below.


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How exactly will your child tax credit be divided?

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

If paid out monthly, the payments would break down to 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, totaling $1,500. You’d 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.

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 will the first child tax credit payments come?

We know a general timeline, but the specifics are yet to be pinned down. The American Rescue Plan stipulates that the CTC payments will start to arrive in July. A specific date hasn’t been released, however, for when the payments will come. 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

Will the CTC payments be sent on a 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, however.

Monthly delivery has been a goal, and was in the initial language used in earlier drafts of the stimulus bill. However, the language changed to “periodically,” perhaps 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. 

“I think 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.

Which payment method will the IRS use to send the CTC payments: Direct deposit, mail, some other way?

When the payments do start arriving, the Treasury and IRS could very well send out the payments the same way they do the stimulus checks, Joanna Powell, managing director and certified financial planner at CBIZ, told CNET. 

It hasn’t been confirmed by the IRS yet, but if the agency does use the same method as stimulus checks, here’s how it would work: If you have direct deposit on file with the IRS, that’s how you’ll get your payment. If not, you’ll receive your money as a paper check. It isn’t clear if Social Security beneficiaries, like people in SSI, SSDI and veterans programs, would receive their CTC through their Direct Express card, the same way millions could get their third stimulus check.

How will you get your CTC checks? What if you already filed your 2020 taxes?

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 inform the IRS of how many dependents are in the household who would count toward the CTC benefits.


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When will the IRS portal be available to make adjustments and correct errors?

The IRS said it 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 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 could help you get a larger tax credit payout.

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

Yes. The CTC 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. Powell explained that 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 of 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.

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It’s unclear if the payments will become permanent.


Sarah Tew/CNET

Could you get all your CTC money at once, rather than several smaller payments?

Absolutely, 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. You’ll be able to use the online portal to opt out. Again, you wouldn’t receive any money until 2022.

What’s the plan 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. President Joe Biden, however, 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 top things you should know about the $3,600 child tax credit for 2021. Plus, here’s how to track your tax refund and your $1,400 stimulus check