Child Tax Credit Awareness Day

Jun 21, 2021

The child tax credit is a federal tax credit that provides relief for nearly all working people with children, lifting many families above the poverty line. For 2021, the child tax credit has been increased from $2,000 per child under 17 to $3,000 for each child between the ages of 6 and 17 and to $3,600 for each child under 6.  The credit has also been expanded to be fully refundable, meaning that children whose parents didn’t have enough earnings in a year to claim the full tax credit previously will receive the full credit in 2021. In Montana, 91 percent of children under 18 (209,000 children) will benefit. These changes are expected to reduce child poverty in Montana by 45 percent, by lifting family income above the poverty line.

Beginning July 15, the IRS will begin sending advanced monthly payments of the child tax credit. While payments will differ for different family situations, in general, for each qualifying child under 6, families will receive $300 monthly. For children ages 6 to 17, each family will receive a monthly payment of $250. The remaining half of the credit will be received when 2021 income tax returns are filed.

Am I eligible for the credit?

If you filed a 2019 or 2020 tax return and claimed the child tax credit on the return, live in the US for at least half the year, and have a qualifying child who is under 18 at the end of 2021 with a valid social security number, you are eligible for the credit.

The child tax credit expansion begins phasing out at incomes of $75,000 for single filers, $112,500 for single filers with dependents, and $150,000 for joint filers.

What should I do to receive advanced payments?

If you have filed your 2019 or 2020 taxes, you don’t need to do anything. If the IRS has your banking information on file, they will automatically deposit your monthly advance of the child tax credit. For filers without banking information on file with the IRS, the IRS will issue checks for advanced payments of the credit.

For families that do not file income taxes, the IRS has released a tool to submit your information to receive the automatic payments. Sign up now.

Can I decline the advanced payment?

For families that prefer to wait until they file their 2021 income taxes to receive the additional credit, the IRS plans to release a tool in the coming weeks to unenroll from payments.

How long will the credit expansion last?

The child tax credit expansion is currently only in effect for 2021.

Montana Budget & Policy Center

Shaping policy for a stronger Montana.

MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.