The child tax credit payments, which were enacted earlier this year, amount to $3,000 annually per child ages 6 to 17 and $3,600 annually for children under 6. Eligible families will receive half of their credit in the form of monthly payments of up to $250 per school-age child and up to $300 per child under 6 from July through December 2021. The other half will be paid out when they file their 2021 taxes. The credit is income-based and starts to phase out for individuals earning more than $75,000 a year or $150,000 for those married filing jointly.
The child tax credit is not a stimulus check, but a pre-payment of a credit you may have normally received on your tax return. Moreover, if you have taken on a new job with higher income or have sold assets, which have created capital gains, please consult with your tax advisor. The math on your tax returns may have changed.
The Child Tax Credit Update Portal, will let you verify if your family qualifies for the tax credit and opt out of receiving any payments this year -- a Spanish version will be available soon, the agency said. The Child Tax Credit Eligibility Assistant is the second new tool and helps families determine whether they qualify for the payments. The Child Tax Credit Update Portal now lets you opt out of receiving the monthly child tax credit payments.
Please always reach out to your tax advisor to discuss how this may impact your 2021 tax Returns.