2021 CHILD TAX CREDIT

When will the $3,000 to $3,600 Child Tax Credit money be sent?

The IRS will send out the first advance payments from the 2021 Child Tax Credit 15 July, but the money may take a few days to a couple weeks to show up.

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When will the $3,000 to $3,600 Child Tax Credit money be sent?
INA FASSBENDER AFP

The Internal Revenue Service will begin sending monthly advance payments on the 2021 Child Tax Credit 15 July, either as a direct deposit or a paper check. Although the money is leaving the IRS, depending on how you will receive the money will determine how long you have to wait to actually be able to use it.

Just like with the stimulus check payments, or even a tax refund, once the payments leave the IRS, they take a few business days to be processed by banks in the case of a direct deposit, or a couple weeks for paper checks to arrive in the mail. Currently the IRS will not be sending prepaid debit cards as they did for some of the stimulus check payments, but that may be an option in the future.

How will I receive my advance 2021 Child Tax Credit payments?

The IRS automatically registered eligible families for the monthly payments based on 2020, or in some cases 2019, tax returns or information provided to the Non-Filer portal. For those who are not required to file a tax return, they can use the IRS Non-Filer online tool to provide the necessary data, if they haven’t already either last year to claim a stimulus from the first of three rounds or the rebooted version where you can now also sign up for the 2021 Child Tax Credit.

The majority of payments will be sent through direct deposit when the agency has an individual’s correct account details. When the agency doesn’t have a bank account, or the information is incorrect, for a recipient, the agency will send the payment in the form of a paper check. If you wish to change how you receive the payments, the IRS created an online tool to help families manage payments.

What does the Manage Payments online portal do?

Using the Manage Payments portal parents can check if they are enrolled for the advance payments. It is currently too late to change the payment method for July, but you can update your bank account information for the August payment.

Likewise, if you are enrolled but want to opt out of the advance payments and receive what you are owed of the 2021 Child Tax Credit as a lump sum payment next year you can unenroll. Again, it is too late to opt out of the July payment, you must unenroll three days before the first Thursday of the following month prior to midnight Eastern Time to stop that month’s payment.

At the moment there is no way to reenroll for monthly payments, but the IRS is working on providing that option for late September 2021.

When will the payments arrive?

As stated before, the direct deposit transfers will not appear in bank accounts immediately on 15 July. If you receive your payment through direct deposit, you will need to give your bank two to three business days to process the transaction.

Paper checks, and likewise prepaid debit cards if they become available, will have to make their way through the Postal Service. If you haven’t given the IRS your bank details, either when you filed your tax return or through one of the IRS portals for the 2021 Child Tax Credit, then you’ll receive a paper check. These could take a week or two to arrive in mailboxes.

Payment dates and deadlines to stop monthly payments

The first deadline to unenroll from the advance payments has passed, so if you qualified keep a look out for the first payment arriving sometime after 15 July. Parents that want to opt out of payments “must do so three days before the first Thursday of next month by 11:59 pm Eastern Time.”

It will take about seven days for the IRS to process the request which individuals can check on the online portal. If you unenroll, there is currently no way to reenroll, but the IRS says that option will be available in late September this year.

For married couples filing jointly, both spouses need to opt out if they wish not to receive the advance payments. Otherwise, if just one unenrolls, the other spouse will receive half of the monthly payment that the couple has been determined to qualify for.

Payment dates and deadlines to unenroll

Payment month
Deadline Date
Payment Date
July
28 June 2021
15 July 2021
August
2 August 2021
13 August 2021
September
30 August 2021
15 September 2021
October
4 October 2021
15 October 2021
November
1 November 2021
15 November 2021
December - Final Payment
29 November 2021
15 December 2021

How much will families receive per child?

Eligible families can receive up to $3,000 per child between the ages of 6 and 17 at the end of 2021. Each child under age 6 at the end of 2021 could qualify for up to $3,600. The credit is fully refundable, so if a family owes less than the amount of the credit, they will receive the excess as a tax refund.

Under the American Rescue Plan, taxpayers can still claim a nonrefundable credit of up to $500 toward the child tax credit for 18-year-old dependents and dependents between the age of 19 and 24 who are attending college full-time. There won’t be an advanced payment on this credit.

Who is eligible to receive the enhanced Child Tax Credit?

Under the new legislation, individuals will qualify for the full value of the Child Tax Credit so long as their annual earnings are below $75,000; or a joint income of up to $150,000 for married couples, widows, and widowers and $112,500 for heads of household. If household earnings surpass these limits, a reduced credit will be distributed. For every additional $1000 in income, the credit's value will be gradually phased out $50.

The IRS will determine eligibility based on 2020 tax returns or 2019 returns if a taxpayer’s 2020 tax return hasn’t been filed and processed yet. To be eligible, a taxpayer must have their main home in the US for more than half the year and care for the dependent for at least half of the calendar year. The IRS urges taxpayers with children to file a 2020 tax return as soon as possible, if they haven’t already, to get the correct amount from the tax credit. This includes those with no income who are eligible to receive the credit but are not normally required to file taxes. The agency also recommends using direct deposit to receive their refund and the advance payments faster.