Tax Newsletter

Three New IRS Tools for 2021 Child Tax Credit Advance Payments

The IRS recently launched three new online tools (links below) to help eligible Americans claim and manage their advance payments of the 2021 Child Tax Credit (CTC). In addition to increasing the maximum CTC amount and raising the age limit for qualifying children, the American Rescue Plan authorized the IRS to send monthly advance payments of the 2021 credit to millions of eligible families beginning in mid-July.

The Child Tax Credit Eligibility Assistant helps families find out whether they qualify for the 2021 CTC. You do not need to set up an IRS online account in order to use this tool. Just answer 2-5 questions about whether you claimed the CTC in 2019 or 2020, where you live, and, in some cases, your tax filing status, family size and income. If the tool determines that you may qualify for the credit, you can follow the MANAGE YOUR ADVANCE PAYMENTS link to make sure you are enrolled to get monthly payments by check or direct deposit beginning in July.

The Child Tax Credit Update Portal provides additional information on eligibility for the 2021 CTC. However, in order to use it, you must either have an IRS online account, or go through an identity verification process. Once you determine that you are eligible, you can use this tool to:

  • Unenroll from the program (for example, if you qualified for the CTC in 2019 or 2020 but do not expect to qualify in 2021 due to a family status or income change)
  • Opt out of receiving advance payments, and instead receive your 2021 credit as a lump sum when you file your tax return
  • Update your mailing address, family size, banking information for direct deposit, etc.

Most eligible families do not need to take any action, and will automatically receive monthly advance payments of the 2021 CTC from July through December. However, if you qualify for the credit but did not file a 2019 or 2020 tax return, you may need to register for this program using the Non-Filers Signup Tool. If you qualified for the CTC in past years but did not claim it, your tax professional can help you file an amended return and perhaps receive an IRS refund for the credit.

CTC Eligibility Assistant:
https://www.irs.gov/credits-deductions/advance-child-tax-credit-eligibility-assistant

CTC Update Portal:
https://www.irs.gov/credits-deductions/child-tax-credit-update-portal

Non-Filers Signup Tool:
https://www.irs.gov/credits-deductions/child-tax-credit-non-filer-sign-up-tool