5 Common Questions about the Advance Child Tax Credit Payments
In July, 35 million families began receiving advance Child Tax Credit (CTC) payments. Families are using their advance CTC payments—up to $300 a month per child—to cover expenses like groceries and clothes, contribute to college funds, save for emergencies, and more. As we look forward to the next payment, scheduled around August 13th, we wanted to answer a few common questions about the payments.
1. If I didn’t sign up for advance payments yet, is it too late to start receiving them? Will I receive less money if I sign up now?
It is not too late! The payments will be sent around the 15th of every month between now and December 2021. You can use the IRS’s Non-Filer tool to sign up for the payments—and if you do, you will also access any stimulus payments you may have been eligible for but did not receive. For step-by-step instructions on using the Non-Filer tool, check out this guide.
No matter when you sign up, your total advance payments for 2021 will equal half of your full CTC amount. If you missed the first few payments, then your remaining monthly payments will just be bigger!
2. Why didn’t I receive a payment in July? I thought I was signed up.
Anyone who is eligible and filed a 2019 or 2020 tax return, signed up for stimulus payments, or signed up for the advance CTC payments through the Non-Filer tool should be enrolled to receive advance CTC payments. You can confirm your enrollment through the IRS’s Child Tax Credit Update Portal.
However, there are a couple of reasons why you may not have received the July payment:
- You signed up through the Non-Filer tool too late to make the cut-off for the July payments. If so, you should receive the August payment.
- You’re a mixed-status family. All children with Social Security numbers are eligible for the CTC, but due to a glitch in the IRS system, parents who filed with ITIN numbers did not receive their July payments. This should have been resolved for August.
- The IRS may have incorrect banking information or an out-of-date home address for you. You can update your banking information now through the Child Tax Credit Update Portal and you should be able to update your address in the portal later this month. For step-by-step instructions on using this portal, check out this guide.
3. Why is my July payment smaller than I expected?
Payments might be less than you expected because of how the IRS calculates children’s ages. The 2021 CTC, and thus the advance payments, are based on how old your child will be on December 31, 2021. So, for example, you may have expected to receive $300 for your five-year-old child in July, but if your child will six by December, they would only be eligible for a $250 advance CTC payment.
Additionally, since your advance payments are based on information from 2020 or 2019—depending on which return you filed most recently—the IRS won’t know about any children who were born in 2021 and would be eligible for advance CTC payments. Later this year, you will be able to update how many children you have—and your marital status and income level—through the Child Tax Credit Update Portal.
4. What if I don’t want to receive monthly payments?
There are several reasons why you might decide you don’t want to receive monthly CTC payments.
- You may prefer to receive your full CTC amount in early 2022 when you file your 2021 taxes, as you had in previous years. You may be expecting a big tax bill, or large expenses, that you’d want to use a large refund to offset.
- You may have experienced changes in your household or income this year—for example, a change in child custody—that will reduce the size of your CTC. While you will be able to update your number of children later in the year, you may decide to opt out of the advance payments in the meantime to avoid overpayment.
You can opt out of the monthly payments through the Child Tax Credit Update Portal.
5. What do I need to do to get the rest of my credit?
You will only receive half of your credit in advance. To receive the rest of your CTC, be sure to file your taxes in early 2022. You may also be eligible for the EITC and the Child and Dependent Care Tax Credit. Free tax filing assistance may be available through VITA, Tax Counsel for the Elderly, and Code for America. And you may qualify for free tax filing software if your income is less than $72,000.
For more information about the CTC and the advance payments in 2021, check out the White House’s information hub ChildTaxCredit.gov and our previous blog, Five Things You Should Know About the Child Tax Credit This Year.