As part of the American Rescue Plan (the coronavirus stimulus package that took effect in March), many families with dependent children are now eligible to receive advance payments of their 2021 Child Tax Credits. According to the IRS, the Child Tax Credit offers up to $3,000 per qualifying dependent child who will be between the ages of 6-17 as of December 31, 2021. For children under 6 (as of December 31, 2021), the credit increases to $3,600.

How does it work?

If you have dependent children, you’ve probably been able to claim the Child Tax Credit on your income taxes in previous years. The credit helps reduce your overall tax bill – and in some cases, may even make you eligible for a refund. But this year, instead of waiting until you file your taxes, the IRS will pay half the total credit amount in advance monthly payments beginning on July 15, 2021. The payments will run through the end of the year. You’ll then be able to claim the other half of the credit when your file 2021 income tax return next year. 

Who's eligible?

In general, families are eligible to receive advance Child Tax Credit payments based on their 2019 or 2020 tax return. Like previous stimulus payments, for most parents, the credits will be paid out automatically with no need to take action. If the IRS has received your banking information, your payment will be sent to you as a direct deposit. Otherwise, they’ll mail a check.

If you’re not normally required to file a tax return or you didn’t file in 2019 or 2020, you’ll need to sign up for the payments via the IRS website.

How much will I get?

If you’re eligible, you should have received a letter from the IRS in June with your estimated monthly payments. Didn't get a letter? You can check whether you’re enrolled to receive the advance payments – and how much you’ll receive – on the IRS Child Tax Credit Update Portal. (The IRS is the only one who can tell you how much you’ll receive and when – Frontwave is not provided with these details in advance.)

Do I have to accept the advance payments?

If you prefer to wait and claim your credit all at once on your 2021 tax return, you can unenroll through the IRS Child Tax Credit Update Portal before the first payment goes out on July 15.

What else do I need to know?

As with previous stimulus payments, there are scammers looking to take advantage of unsuspecting families. Be alert to suspicious requests for personal information to process your advance payments, or emails with attachments or links claiming to have special information about them. The IRS, like Frontwave, will never contact you email, text, or social media to request personal or financial information.

Check out our infographic on phishing scams to learn more about spotting and protecting yourself from common financial scams.

Got other questions not answered here?

Visit the IRS website to learn more about enrollment and payment dates, make changes to your information on file with the IRS, or get answers to additional FAQs.