On 2020 Federal Income Tax return, if you claimed the CHILD TAX CREDIT. For tax year 2021, the Child Tax Credit has increased. The maximum amount for children 6-17 years is $3000 and for children 0-5 years the maximum amount is $3600.
Beginning today, July 15, 2021, the IRS will pay half the total credit amount in advance monthly payments. The amount you will be paid will be half of your estimated 2021 CTC divided by 6 monthly payments. (For example if your estimated 2021 CTC is $3000, then you will get $250 per month through Dec 2021.) You will claim the other half when you file your 2021 income tax return. These changes apply to tax year 2021 only.
When you come in to file your taxes next year, we will reconcile your Advanced Child Tax Credit payments you received. If your CTC is more than the payments you have already received, you can claim the remaining balance on your 2021 Federal Income Tax return. If your CTC is less than the payments you have already received, you may need to repay the IRS the difference.
In January 2022, the IRS will send you Letter 6419 to provide the total amount of advance Child Tax Credit payments that were disbursed to you during 2021. Please keep this letter regarding your advance Child Tax Credit payments with your tax records as we will need it to file your 2021 Federal Income Tax return.
As a reminder, the amount of money you receive in Advanced CTC payments this year WILL REDUCE your 2021 tax refund and may even cause you to owe the IRS.
For questions, please go to Advanced CTC FAQ
To manage your payments (stop or reduce payments or change how you receive your payment) go to CTC Update PORTAL