Advance Child Tax Credit

To help families during COVID, the U.S. government made changes to the Child Tax Credit (CTC). Families can get half of the fully refundable credit—worth up to $3,600 per child—as monthly payments in 2021 and the other half as a refund in 2022. Child Tax Credit payments begin July 15, 2021.

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How Much Will I Receive?

Families claiming the CTC for tax year 2021 will receive up to:

  • $3,600 per qualifying child who will be under the age of 6 by the end of 2021
  • $3,000 per qualifying child who will be between the ages of 6 and 17 by the end of 2021

You are eligible for the full CTC amount if your adjusted gross income (AGI) on your latest tax return is:

  • $75,000 or less for single filers or married couples filing separately
  • $112,500 or less for heads of household
  • $150,000 or less for married couples filing a joint return and qualifying widows or widowers

Payments will begin to phase out for incomes above those AGI amounts.

Am I Eligible?

You could be eligible if you have a child who meets the following criteria:

  • Will be under the age of 18 by the end of 2021
  • Has lived with you for over half the year
  • Has a Social Security Number (Only the child needs a social security number, the parent or caregiver does not)

You could be eligible even if you:

  • Didn’t earn any income or owe taxes in 2020
  • Don’t usually file taxes or haven’t for the past few years
  • Don’t have a social security number
  • Are currently experiencing homelessness
  • Are currently incarcerated

A permanent address is not required to receive a payment. Individuals can have their CTC advance payments mailed to the address of a friend, relative, or trusted service provider, such as a shelter, drop-in day center or transitional housing program. For families unable to choose direct deposit, a check or debit card for the credit can be mailed to this address.

How Will Advance Payments Work?

The IRS will issue advance monthly payments of the tax year 2021 CTC on July 15th, August 13th, September 15th, October 15th, November 15th and December 15th. Payments will be made either by direct deposit to a bank account or mail (paper check or prepaid debit card) using the information the IRS has on file.

The advance payments will be up to 50% of a filer’s total CTC split into monthly payments – filers will receive the remaining 50% when they file their tax year 2021 return in 2022. The advance payment will be up to $300 per month for each qualifying child under the age of 6 and up to $250 per month for each qualifying child between the ages of 6 and 17.

The IRS will determine eligibility and estimate advance payments using the latest information filers have submitted, including from:

  • An eligible filer’s 2020 federal tax return (or their 2019 return if the 2020 return is not filed or processed yet)
  • Information submitted via the IRS Non-filers tool in 2020 to sign up for federal stimulus payments.

How Can I Sign-Up for Advance Payments?

Most families will automatically receive advance payments. There is no additional action needed to sign up for the advance payments if someone has already filed a 2019 or 2020 federal tax return or used the IRS Non-filers tool in 2020 to sign up for Economic Impact Payments. However, for those whom the IRS does not have information for there are two ways to sign up:

  • Option 1: File a 2020 tax return for free with NYC Free Tax Prep as soon as possible. For those who have already filed a return, there is no additional action needed. Filing a return ensures you also get additional tax credits you may be eligible for, including the Earned Income Tax Credit (EITC) and Child and Dependent Care Credit (CDTC), and any federal stimulus payments you may be eligible for. If you haven’t filed in the last few years (tax years 2018, 2019, or 2020), it's also not too late to claim significant tax credits for those tax years.
  • Option 2 (only available to those without a filing requirement*): Enter your information using the IRS’ Child Tax Credit Non-Filer Sign-Up Tool. This tool can also be used to claim the 2020 Recovery Rebate Credit to get any amount owed to you from the first and second federal stimulus payments and to claim your third stimulus payment. You will need the following pieces of information to sign up using this method:
    • Full name
    • Current mailing address
    • Email address
    • Date of birth
    • Valid Social Security numbers (or other taxpayer IDs) for you and your dependents
    • Bank account number, type and routing number, if you have one
    • Identity Protection Personal Identification Number (IP PIN) you received from the IRS earlier this year, if you have one

*You are required to file a return if your 2020 adjusted gross income exceeds $12,400 for individual filers and $24,800 for married filers filing jointly.

Families can also use the IRS’ Child Tax Credit Update Portal to decline advance payments and instead receive the full amount of the credit when they file their 2021 federal tax return in 2022. In the future, the tool will allow families to notify the IRS of changes in their income, filing status, or number of qualifying children; update their direct deposit information; and make other changes to ensure they are receiving the right credit amount as quickly as possible.

The CTC advance payment, whether you decide to receive it or not, will not impact your eligibility for other federally-funded benefit programs, such as the Supplemental Nutritional Assistance Program (SNAP). Tax credits do not count as earned income and will not impact immigration status or applications.

The fastest way to get the credit is by direct deposit to a bank account. Families can visit Financial Empowerment Centers for free help opening a bank account. To set up an appointment, visit nyc.gov/TalkMoney or call 311 and ask for “financial counseling”.

For families who have not yet filed their tax year 2020 federal return:
You may be able to claim the tax year 2020 CTC if:

  • You have a qualifying child who was under the age of 17 by the end of 2020
  • You earned at least $2,500 in 2020. Benefits will begin to phase out for individual earners who earned $200,000 and married filers filing jointly who earned $400,000 in 2020.

Families claiming the tax year 2020 CTC will receive up to $2000 per qualifying child.

The tax year 2020 credit is partially refundable, so even if the credit is larger than your federal income tax liability you may still receive a portion of the credit as a refund.

You can use a special “look-back” rule to claim the tax year 2020 credit using your 2019 income to help compensate for any income loss or changes caused by the COVID-19 pandemic.