Advance Child Tax Credit Payments

Tax Filing Update

Pursuant to the changes set forth in The American Rescue Plan, the Department of Treasury will be automatically issuing advance payments of the Child Tax Credit to eligible taxpayers beginning July 15th 2021.  Here is what you should know:

  • For tax year 2021 the Child Tax Credit (CTC) has been increased to $3,000 per child between the ages of 6 and17 and $3,600 for children under 6.  50% of the refundable credit will be automatically paid in advance monthly payments from July through December.
  • The maximum credit is available for taxpayers with a 2021 Modified Adjusted Gross Income of:
    • $75,000 or less for single taxpayers
    • $112,500 or less for head of household
    • $150,000 or less for married couples filing joint, widow(er)s 
  • If you are eligible based on your 2020 (or 2019) tax filing, no action is needed to receive payments.  They will be automatically deposited if the IRS has your bank account information on file, if the IRS does not have bank account information on file you will automatically receive a check to the address on your most recent tax return.
  • If you were eligible for the CTC based on 2020 income, but you do not believe you will be eligible based on 2021 income, we recommend that you opt out at  Unlike other covid-related tax credits, any credits issued to ineligible taxpayers will have to be repaid when filing your 2021 tax return.  Similarly, any eligible taxpayers that do not receive the credit in advance will receive the full credit when filing their 2021 tax return.

Let us know if you have any questions.  For example, if your 17-year-old child turns 18 in 2021 you are not eligible to receive a credit for that child.

Truly Yours, 

Reason Financial

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