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Child tax credit 2021: Will you have to repay? Use this IRS tool to check

This year's child tax credit eligibility is tricky. Not sure if you need to opt out? We'll explain.

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If you don't qualify for child tax credit payments you'll need to opt out by Aug. 30. 

Sarah Tew/CNET

Most US eligible families will receive the next child tax credit payment next Friday, Aug. 13. Even though many parents qualify for the advance checks, many don't for a few reasons. This year's child tax credit program means that parents could get up to $300 per month, per child. But if you're not eligible and receive payment, you may pay back a portion to the IRS next year. Fortunately, the IRS Eligibility Assistant Tool makes it easy to check. You can answer a few questions, then use the Child Tax Credit Update Portal to manage your information, payments and opt out if you need to.

Opting out is the best option for parents if their circumstances have changed and they no longer qualify (a promotion is a good example). But even if you qualify, advance payments are optional, and you can get the total amount during tax time. If you choose to opt out, you'll need to do so by Monday, Aug. 30 to unenroll from September's check and others after. Keep in mind that these regular prepayments are not a tax deduction, but an actual cash credit. You can use CNET's child tax credit calculator to get an estimated total if you haven't already. 

The IRS online tool is a good way to check your eligibility online without the hassle of calling the IRS. You'll need some personal information and an account with the IRS, you'll need a bit of time to set one up using ID.me. If you are eligible, you can use CNET's child tax credit calculator to get an estimated total if you haven't already. We've updated this story. 

How do I qualify for 2021 child tax credit payments?

Parents may qualify for the full child tax credit payments if they meet one of the following rules outlined by the IRS. 

  • $150,000 in total earned income if married and filing jointly
  • $112,500 in earned income if filing as head of household 
  • $75,000 in earned income if filing single 

If parents meet these income requirements, each dependent under 6 may get parents up to $300 per month through December and the other half during the 2022 tax season -- totaling $3,600. Children ages 6 to 17 may yield up to $250 per month and up to $3,000 total. Parents of dependents ages 18-24 will have to wait until tax time to get the total amount. 

If you make more than the income requirements, you may still get advance child tax credit payments, but less than the maximum amount. The IRS subtracts $50 from each advance check for every $1,000 earned above the income limit. So if you make $85,000 as a single-filer, you may be eligible for up to $200 per month -- depending on your child's age.

There are a few other eligibility requirements for dependents to keep in mind: 

  • Must be a US citizen 
  • Must be younger than 17 before the last day of the tax year
  • Must be claimed on the parent's tax return 

How can I check my child tax credit eligibility online? 

Before you begin, make sure you've got a copy of your 2020 tax return, or your 2019 tax return if you haven't yet filed your taxes this year (for example, if you filed an extension). If you don't have a tax return on hand, you can use your filing status and the number of children you claimed, along with an estimate of your total income for 2020. 

You can use the IRS Eligibility Assistant tool to answer a few quick questions. If you qualify, you'll use your tax return and the Child Tax Credit Update Portal to see if you're enrolled for payments. You can also unenroll -- even if you don't qualify, but got your first check. 

Once you've figured out what your income was for 2020 or 2019, you can check your eligibility. Here's how.

1. Go to the Advance Child Tax Credit Eligibility Assistant tool page on the IRS website.

2. Tap or click Check Your Eligibility.

3. You'll then need to answer a few questions about yourself and your taxes. For instance, the form will ask if you claimed the child tax credit on a previous tax return.

4. You may need to provide additional information, depending on how you answered the questions. Here's where you fill in your filing status, adjusted gross income and the number of children you claimed on your tax return (along with their ages).

5. After you hit Next, the tool will let you know whether you qualify based on the answers you provided. It'll tell you the amount each kid under 6 qualifies you for, and how much each kid 6 and older qualifies you for. It'll also show you the income phaseout details.

6. From here, tap or click Manage your advance child tax credit payments, which will take you to the child tax credit portal that lets you unenroll from the monthly payments if you'd prefer to get one large check instead of several smaller ones, or submit your information if you're a nonfiler.

Keep in mind that the Eligibility Assistant tool and Child Tax Credit Update Portal do not tell you how much you are eligible for. The tool also doesn't tell you:

  • The personalized total you'll get from the child tax credit payment. It leaves it up to you to do the math.
  • How much the payments will be reduced if your income exceeds the limit.
  • All of the payment dates for the child tax credit.
  • Only one parent can claim the money for any given child in a shared custody situation.

You can find an answer to most of those questions in our child tax credit FAQ

What if parents are no longer eligible for child tax credit checks? 

If you're unsure of whether or not you qualify based on the requirements, confirm with the Eligibility Assistant tool and update your information using the Child Tax Credit Update Portal. Currently, you can use the portal to update your bank information and unenroll from this year's prepayments. This month, you'll be able to update your mailing address. You should be able to update your income and dependents by next month. 

To be on the safe side, you can also opt out and get one lump sum during tax time next year. The deadline to opt out of the August payment has passed, but there's still time to opt out of future payments. The next opt-out deadline is Monday, Aug. 30, but you can opt out any time between now and December if your circumstances change. 

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Dependents, ages 18-24, can claim the full child tax credit amount during tax time next year. 

Sarah Tew/CNET

Do new parents qualify for child tax credit payments? 

If you adopt or have a baby sometime in 2021, you'll need to update your information in the IRS Update Portal once that feature is made available in late summer. When the agency has your updated details on file, you'll be eligible to receive future payments. For instance, if your baby is born Sept. 20, you could start getting the advance payments in October. You'll have to wait until 2022 to get the July, August and September payments retroactively. 

If your baby is born in December 2021, you can claim the money you didn't get from July through December when you file your taxes next year. If you have a newborn in January 2022, you won't be eligible for the larger sum of money that was approved in the American Rescue Plan, but you could be eligible for the original amount -- unless the enhanced child tax credit is extended.

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