Military families and individuals may be eligible for up to $1,800 in federal child tax credits, even if they didn’t file taxes in 2019 or 2020, according to the Internal Revenue Service.
If you already applied for the Child Tax Credit on your income taxes in the past, you may already be receiving half the Child Tax Credit’s total — up to $1,800 for children ages five and younger and up to $1,500 for children ages six through 17.
The advance payments are part of the federal coronavirus response approved in March with the American Rescue Plan Act of 2021.
If you’re eligible for the tax credit and miss the deadline to sign up, you can still claim the full credit of up to $3,600 per child when you file your 2021 taxes next year.
How Much Is the Advance Child Tax Credit for 2021?
For the 2021 tax year, the Child Tax Credit increased from $2,000 per qualifying child to:
- $3,600 for children ages 5 and younger at the end of 2021
- $3,000 for children ages 6 through 17 at the end of 2021
Monthly Advance Child Tax Credit (CTC) payments of $250 and $300 started in July and ended in December.
When Are Advance Child Tax Credits Being Distributed?
About $15 billion in Advance CTC payments in September went to 35 million families, according to the Internal Revenue Service (IRS) and U.S. Treasury Department. Future Advance CTC payments are scheduled for Nov. 15 and Dec. 15.
Is the Third Stimulus Check a 2021 Tax Credit?
The third stimulus check that the U.S. government issued was also an advance tax credit. If you did not claim the Recovery Rebate Credit ahead of time, you may be eligible to claim the credit on your return. You must meet the IRS’s income guidelines to qualify.
Can I Sign Up for Advance Child Tax Credits?
If you didn’t file a 2019 or 2020 federal tax return, you can still receive advance child tax credit payments.
If your income was tax-exempt because of a combat deployment, you’re eligible for the tax credit as long as you provide more than half the support for a qualified dependent. Homeless, unemployed, newly employed or newly-enlisted individuals making less than the reportable income threshold can also collect the tax credit.
Eligible parents or guardians must provide half the support for a child, stepchild, sibling (including step-siblings and half-siblings), grandchild, niece or nephew or foster child who is under the age of 18 until Jan. 1, 2022.
The filer (a U.S. citizen, national or resident alien) – or their spouse, if married and filing a joint return – must maintain residence in the United States for more than half the year.
Determine your eligibility and file a simplified tax return to get payments on the IRS’ Advance CTC 2021 page.
By signing up, you may also be considered for third-round Economic Impact Payments of up to $1,400 per person, the IRS said. Or, you may claim the Recovery Rebate Credit from the first two rounds of Economic Impact Payments you may have missed.
Who Is Eligible for the Advance Child Tax Credit?
Not everyone is eligible for advance child tax credit payments. To be eligible you (and your spouse, if filing jointly) must:
- Have child with a valid social security number who was under age 18 at the end of 2021.
- Be within the income limits.
- Have filed a 2019 or 2020 tax return.
- Have claimed the child tax credit on your return.
- Have lived in the United States for more than six months.
You may also be eligible if you entered your information to get a stimulus check in 2020 or provided the IRS with your information in 2021.
How the Advance Child Tax Credit Will Affect Your Taxes
While claiming advance child tax credit payments won’t affect your ability to file for other benefits, it will impact your taxes if you don’t keep your files up-to-date. Make sure everything on file with the IRS is correct, including the number of qualifying children you have, your filing status and your household income. People who failed to do this throughout 2021 may find they were overpaid in tax credits.
How to Account for Advance Payments on the 2021 Tax Return
When you file your 2021 tax return, you will need to compare the payments you received to the amount you are eligible for. The IRS sent out Letter 6419, the Advance Child Tax Credit letter, in Dec. 2021 to Jan. 2022. This letter will help taxpayers reconcile their 2021 advance child tax credit payments with the CTC payment they are eligible for.
Families who didn’t claim any of the advance payments in 2021 will be eligible for the entire CTC amount of between $3,000 and $3,600. This includes families who wouldn’t normally need to file.
How to Make Change or Unenroll from Advance Child Tax Credit Payments
To get future Advance CTC payments by direct deposit, you can make changes using the IRS’ Child Tax Credit Update Portal.
If you no longer qualify for the payments, you can stop them by unenrolling. Married couples must both unenroll or one spouse might still receive payments.
You may unenroll for several reasons, including expecting your taxes to be more than your refund next year.
Will the Advance Child Tax Credit Reduce My Refund?
If you received higher payments than you were eligible for in credits, it may impact your tax refund. You might even discover you owe the IRS. Any changes in your income or the age of your child(ren) can impact eligibility and potentially reduce your refund.
Keep in mind that when you claim the advance credit, it reduces your next return. So, most families will be getting back about half of the total CTC amount because the rest was paid during the latter half of 2021.
To avoid owing the IRS, claim the credit when filing your 2021 tax return instead.
For more on COVID-19-related tax relief, visit IRS.gov/coronavirus.
Will We Get Advance Child Tax Credits in 2022?
Anyone wondering about the child tax credit 2022 schedule may be disappointed. The final monthly advance CTC payments were made in December 2021. There are currently no plans to have the advance payments for child tax credit extended to 2022. When you file in 2023, the benefit is set to revert back to $2,000 per child under the age of 17. You also won’t be able to claim advance monthly payments.