Parents, you will likely receive a monthly cash injection for each minor child during the second half of 2021. Monthly payments for additional temporary child tax credits will begin pouring into bank accounts on July 15.
The credits, which are part of the American Relief Plan, provide an additional $ 1,000 for children ages 6 to 17 and an additional $ 1,600 for children under 6, in addition to the regular $ 2,000 child tax credit. The total value of the tax credit is $ 3,000 for children ages 6 to 17 and $ 3,600 for children under 6 years of age.
Half of that money will be paid in advance through monthly installment payments. You will receive $ 250 a month for each dependent child ages 6 to 17 and $ 300 a month for each child under the age of 6. Then you will receive the other half of the credit when you file a 2021 tax return next year.
But the rules can get confusing if your child is celebrating a sixth or eighteenth birthday soon. These are the court dates based on your child’s date of birth. For other eligibility rules, including income limits, see our Child Tax Credit FAQs.
You get $ 250 / month if your child was born after this date
To qualify for monthly child credits of $ 250, your child must be 17 years old or younger on December 31, 2021. That means if your child was born on or after January 1, 2004, you must receive the additional $ 250 per month. if you meet the other requirements. Then, you’ll get a $ 1,500 tax credit when you file your 2021 tax return.
But what if you are the father of a baby from 2003? I’m sorry, but you won’t get a child tax credit for your child, even if he or she is still a dependent.
You get $ 300 / month if your child was born after this date
To qualify for monthly child credits of $ 300 ($ 3,600 total), your child must be 5 years old or younger on December 31, 2021. That means if your child was born on or after January 1, 2016, you must receive the additional $ 300 per month if you meet the other requirements. You will then receive a tax credit of $ 1,800 when you file your 2021 tax return.
If your child was born between 2004 and 2015, you will receive the additional $ 250 per month, followed by the $ 1,500 credit when you file your 2021 taxes.
What about babies born in 2021?
If your child was born in 2021, they will still qualify for the full $ 3,600 tax credit. But because you did not include your son on your 2020 tax return, you will not automatically receive your monthly payments. The IRS says on its website that taxpayers “will have the opportunity to update information about changes in their income, marital status, or number of qualifying children.”
You will likely be able to provide the child’s information and begin receiving monthly payments, although the IRS has not released any further details. Otherwise, you will have to wait and receive the full credit of $ 3,600 when you file your taxes.
If you have a new addition to the family on the way, they will still qualify for the $ 3,600 credit, as long as they make their debut before December 31, 2021.
One bonus for all those 2021 babies: Not only will they be eligible for the $ 3,600 child credits, but you will also receive a $ 1,400 stimulus check in your name when you file your 2021 return.
Robin Hartill is a Certified Financial Planner and Senior Writer at The Penny Hoarder. Write Dear Penny’s personal finance advice column. Send your misleading money questions to [email protected].