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Do you qualify for the 2021 child tax credit? Income limit rules and more

Here's what to know about eligibility for the child tax credit before the IRS starts sending out advance payments in July.

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There's a lot to know about the new child tax credit payments. 

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Starting in July, the IRS will disburse the first of seven monthly child tax credit payments to families with qualifying dependents. If you meet all the requirements, exactly how much money you're owed will depend on the age of your child. For example, you can get up to $300 per month for each child who is 5 years old or younger, which would total $3,600 between now and 2022 (babies born in 2021 are also included). You can get up to $250 for each child between the ages of 6 and 17, which would total $3,000. 

We can tell you what families need to know to qualify for the child tax credit and the total monthly amount you should expect to get, unless you prefer one large payment instead of several smaller ones. We can also offer some ideas for ways to spend or save your money once it comes.

The child tax payments could possibly be extended to 2025, but that's still to be determined. Families with children should also know how to claim up to $16,000 in child care expenses. As a side note, here's what's happening with a potential fourth stimulus check, what to do if you haven't received your third stimulus checkwhen it could comehow to track it and how to see what could be causing a delay. This story was recently updated. 

Families with children ages 5 and younger could receive $3,600 per kid between now and next spring

If your dependents are below the age of 6, you can claim up to $3,600 per child as long as you meet the income requirements, which are listed below. That's $1,600 more than the $2,000 parents were able to claim on their 2020 tax returns. 

This includes newborns, even if they're born later in 2020. The parent filer would likely be able to update the IRS portal with their new dependent information to begin receiving the advance payments this year, said Garrett Watson, a senior policy analyst at Tax Foundation. Otherwise, parents can file a claim on their 2021 tax returns next year. However, everything is subject to change from now until the IRS provides more information and gets the portal up and running (the agency hasn't set a specific timeline for that yet).

Child tax credit 2021 qualifications

Who qualifies What the law says
Single filer An AGI of $75,000 or less to qualify for the full amount
Head of household An AGI of $112,500 or less to qualify for the full amount
Couple filing jointly An AGI of $150,000 or less to qualify for the full amount
Child age 5 and younger Credit for $3,600 each if parent/guardian meets above requirements
Child age 6-17 Credit for $3,000 each if parent/guardian meets above requirements
Nonfiler Will need to file a 2020 tax return to get the payment

Families with children between ages 6 and 17 could receive up to $3,000 per kid

If you have dependents who are age 6 or older, you'll qualify for up to $3,000 per kid over the next year, assuming you meet the income requirements (refer to the chart above). This includes your dependents who are 17 years old -- originally, parents could only claim up to $2,000 for each dependent age 16 and younger.

You can also get money for your older kids, although it's not nearly as much. You can claim up to $500 for an 18-year-old, as well as for full-time college students aged 19 to 24. 

Here's what parents who share custody of a qualified dependent should know.

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Individuals who make $75,000 or less could receive the full amount

As long as your adjusted gross income -- or AGI -- is $75,000 or less, single taxpayer parents will qualify for the full child tax credit amount. After $75,000, the amount begins phasing out.

The credit phases out by $50 for every $1,000 of income over the threshold amounts for all filers, according to Joanna Powell, managing director at CBIZ.

Heads of household with an AGI of $112,500 could receive the whole amount

As a head of household, your AGI will need to be $112,500 or less to qualify for the full child tax credit amount. The amount you could get begins phasing out if your income is over $112,500.

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Married couples filing jointly with an adjusted gross income less than $150,000 could get a partial payment

If you're married and filing jointly with your spouse, your AGI needs to be $150,000 or less to qualify for the full child tax credit amount. 

How the advance child tax credit works for those who don't file taxes

Even if you don't usually file taxes -- you're considered a nonfiler -- you'll need to file a return to qualify for the 2021 child tax credit. IRS Commissioner Charles Rettig said that payments will be automatic for those who file their 2020 tax returns by May 17, so if you don't have your tax return submitted by this time, the IRS won't know to send you a payment.

It's also important to file a return in case you've gained new dependents since you last filed. That way you can get the full child tax credit amount you're due.

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More requirements that need to be met for advance child tax credit payments

  • The child you're claiming must live with you for at least six months out of the year.
  • You and your child must be US citizens, unlike mixed-status households. 
  • For married couples filing jointly, at least one spouse needs to have a Social Security number or an ITIN, Powell said. 
  • The child must also have a Social Security number -- a child with only an ATIN won't qualify. (This includes adopted children.)
  • Parents who share custody of a child cannot both get the tax credit.

Important: The results here are based on our current knowledge of the law, but should be treated as broad estimates only. Consult a financial planner for a more personalized estimate.

For more information, here's what to know about the 2021 child tax credit and when your payments will start arriving.