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2021 Advance Child Tax Credit

*  Advance Child Tax Credit payments are early payments from the IRS of 50 percent of the estimated amount of the Child Tax Credit that you may properly claim on your 2021 tax return during the 2022 tax filing season. If the IRS has processed your 2020 tax return or 2019 tax return, these monthly payments will be made starting in July and through December 2021, based on the information contained in that return.

*  Your advance Child Tax Credit payment amounts by estimating the amount of the Child Tax Credit that you will claim on your 2021 tax return during the 2022 tax filing season.

*  Our estimate of your 2021 Child Tax Credit is based on information shown on your processed 2020 tax return. If we have not processed your 2020 tax return when we determine the amount of your advance Child Tax Credit payment for any month starting July, we will estimate the amount of your 2021 Child Tax Credit based on information shown on your 2019 tax return (including information you entered into the Non-Filer tool on IRS.gov in 2020). Once we have processed your 2020 return, we will recalculate your advance Child Tax Credit payments and adjust any remaining monthly payments.

*  Your total advance Child Tax Credit payment amounts will equal half of the amount of your estimated 2021 Child Tax Credit. This amount is then divided into monthly advance payments to you.

As a result:

  • For each of your qualifying children age 5 or younger, generally you will receive $300. That is determined by dividing $3,600 in half, which is $1,800. Six monthly payments of $300 will provide you with $1,800.
  • For each of your qualifying children ages 6 to 17, generally you will receive $250. That is determined by dividing $3,000 in half, which is $1,500. Six monthly payments of $250 will provide you with $1,500.

*   For tax year 2021, a qualifying child is an individual who does not turn 18 before January 1, 2022, and who satisfies the following conditions:

  1. The individual is the taxpayer’s son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of any of them (for example, a grandchild, niece, or nephew).
  2. The individual does not provide more than one-half of his or her own support during 2021.
  3. The individual lives with the taxpayer for more than one-half of tax year 2021. For exceptions to this requirement, see IRS Publication 972, Child Tax Credit and Credit for Other Dependents PDF.
  4. The individual is properly claimed as the taxpayer’s dependent. For more information about how to properly claim an individual as a dependent, see IRS Publication 501, Dependents, Standard Deduction, and Filing Information. PDF
  5. The individual does not file a joint return with the individual’s spouse for tax year 2021 or files it only to claim a refund of withheld income tax or estimated tax paid.
  6. The individual was a U.S. citizen, U.S. national, or U.S. resident alien. For more information on this condition, see IRS Publication 519, U.S. Tax Guide for Aliens. 
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© Colleen Black & Co PC CPA 2021