8/11/2021
The Advance Child Tax Credit allows qualifying families to receive early payments of the tax credit they may claim on their 2021 tax return during the 2022 tax filing season. The IRS is in the process of disbursing these advance payments monthly through December 2021.
Here are some details to help you better understand these payments:
Who is a qualifying child for the purposes of the Advance Child Tax Credit Payment?
A qualifying child is your dependent who meets these requirements for tax year 2021:
They do not turn 18 before January 1, 2022.
They are your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister or a descendant such as a grandchild, niece, or nephew.
They do not provide more than half of their own support during 2021.
They live with you for more than half of 2021. (For exceptions to this, see Publication 972, Child Tax Credit and Credit for Other Dependents.)
They are properly claimed as the your dependent. (For more information see Publication 501, Dependents, Standard Deduction, and Filing Information.)
They do not file a joint return with a spouse for 2021, or they file one only to claim a refund of income tax withheld or estimated tax paid.
They were a U.S. citizen, U.S. national, or U.S. resident alien. (For more information, see Publication 519, S. Tax Guide for Aliens.)
What should you do if you don’t want to receive Advance Child Tax Credit Payments?
If you do not want to receive monthly advances of the child tax credit payments because you would rather claim the full credit when you file your 2021 tax return, or because you know you won't be eligible for the credit in 2021, you can unenroll through the Child Tax Credit Update Portal. You can unenroll any time, but there are deadlines each month for the update to take effect for your next payment.
Payment Month Deadline to Update Information Payment Date
September 8/30/2021 9/15/2021
October 10/4/2021 10/15/2021
November 11/1/2021 11/15/2021
December 11/29/2021 12/15/2021
If you are married filing jointly, you and your spouse must BOTH unenroll in the Child Tax Credit Update Portal. If only one spouse unenrolls, the other spouse will still receive half the normal payment. Also, if you are changing bank account information, both of you must make the update for both of your halves of the payment go to the new account.
Will receiving Advance Child Tax Credit Payments affect other government benefits you receive?
No. Advance Child Tax Credit Payments will not be counted as income when determining your eligibility for benefits or assistance, or how much you can receive, under any federal, state or local program financed in whole or in part with federal funds. Also, these programs can't count Advance Child Tax Credit Payments as a resource when determining eligibility for at least 12 months after payments are received.
The Advanced Child Tax Credit Payments are not subject to offset for any reason through the Treasury Offset Program (TOP).
They will not be reduced for child support owed by your or your spouse, or for overdue taxes from prior years or other federal or state debts that you owe while you are receiving the advanced monthly payments. However, if you receive a refund when you file your 2021 tax return, any remaining Child Tax Credit amounts included in your refund may be subject to offset for tax debts or other federal or state debts you owe.
Advanced Child Tax Credit Payments are NOT exempt from garnishment by non-federal creditors under federal law.
Your Advanced Child Tax Credit Payments may be subject to garnishment by your state, local government, and private creditors, including pursuant to a court order involving a non-federal party, such as for fines related to a crime, administrative court fees, restitution, and other court-ordered debts. Some states and financial institutions have chosen to protect these payments, however, and they may still be protected from offset by the federal government. You can refer to 2021 Child Tax Credit and Advance Child Tax Credit Payments — Topic G: Receiving Advance Child Tax Credit Payments for more information.
Are Advanced Child Tax Credit Payments taxable?
No. These payments are not income and will not be reported as income on a taxpayer’s 2021 tax return because they are advance payments of your tax year 2021 child tax credit.
If the total amount of Advanced Child Tax Credit Payments you receive is greater than the Child Tax Credit amount you can claim on your 2021 tax return, you may have to repay the excess amount.
The total amount of Advanced Child Tax Credit Payments you receive is based on the IRS’s estimate of your 2021 child tax credit. The IRS uses information from prior tax returns to calculate your estimate. For example, if you receive Advanced Child Tax Credit Payments for two qualifying children claimed on your 2020 tax return, but you no longer have qualifying children in 2021, the advance payments you received are added to your 2021 income tax unless you qualify for Repayment Protection.
You qualify for Full Repayment Protection and won’t need to repay any excess amount if your main home was in the United States for more than half of 2021, and your 2021 modified adjusted gross income (AGI) is at or below the following amounts:
$60,000 if you are married and filing a joint return, or filing as a qualifying widow or widower
$50,000 if you are filing as head of household
$40,000 if you are a single filer, or are married and filing a separate return
You won’t qualify for Repayment Protection if your 2021 modified AGI is at or above these amounts:
$120,000 if you are married and filing a joint return, or if filing as a qualifying widow or widower
$100,000 if you are filing as head of household
$80,000 if you are a single filer or are married and filing a separate return
If you qualify for it, the amount of your tax liability from excess Advance Child Tax Credit payments is reduced by up to the Full Repayment Protection Amount.
To determine the Full Repayment Protection Amount, take:
The number of qualifying children the IRS used to determine your Advance Child Tax Credit Payments MINUS the number of qualifying children who actually should have been used to determine the Child Tax Credit amount on your 2021 tax return.
Multiply the above number by $2,000, and that is your Full Repayment Protection Amount.
Reduce the amount of any tax liability you owe from excess Advance Child Tax Credit Payments by your Full Repayment Protection Amount.
See the IRS page 2021 Child Tax Credit and Advance Child Tax Credit Payments Frequently Asked Questions for detailed information on Repayment Protection and more.