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Child tax credit: Parents of 2021 babies can get up to $3,600, too – CNET

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New parents of 2021 babies can still get monthly child tax credit payments starting July 15. 

Sarah Tew/CNET

Expenses and stresses can pile up quickly for parents of newborns. But last year was more challenging than ever for new parents due to the pandemic. And parents now have to think about what the new child tax credit rules mean for them. In previous years, parents would claim their children on their tax return and receive a $2,000 child tax credit as part of their refund. But things are different this year. 

Thechild tax credit check is now up to $3,600 for eligible children under age 6 and $3,000 for kids between ages 6 and 17. The other big change is the payment schedule. This year, the IRS is sending automated advance monthly checks to qualifying families (unless you opt out). It’s great news for parents who need the extra money now, but the requirements can be confusing — especially for those with new babies born this year (and even more confusing for parents expecting babies in 2022).

Parents of 2021 babies must complete one extra step to start getting advance child tax credit payments this year. We’ll break down eligibility requirements and how to use the IRS web portals to claim your payments. Read on to understand how the portals work and how you’ll use them to claim the credit for babies born or adopted in 2021, or any new dependents who weren’t listed on your 2020 return. Plus, here’s how to claim an additional $8,000-to-$16,000 credit for child care expenses and what we know about a fourth stimulus check that may be coming.

How much is the child tax credit worth for new parents?

The new child tax credit for 2021 newborns will be capped at $3,600 per eligible child, going down from there as your income goes up. The IRS uses different AGI phaseout limits (when your income is too high to qualify for the full amount of the credit) for single filers, heads of household and married couples filing jointly. CNET built a calculator for determining your specific payment eligibility, which you should definitely try out, especially if you also have older children (kids 6 and up qualify for less), share custody or don’t hold US citizenship.

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How can parents of 2021 babies claim the child tax credit?

If your dependents haven’t been reported to the IRS by July (or haven’t even been born yet), you have two options for receiving your payment. First, you could always wait until you file your return next spring and receive the entire child tax credit in one lump sum, just like how the former version of the credit worked. But if you’d like to receive monthly payments before next year’s tax season rolls around, there’s another option. 

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Parents can unenroll from monthly payments using the Child Tax Credit Update Portal. 

Sarah Tew/CNET

The IRS has set up two online portals for special cases like this one. The Child Tax Credit Update Portal will allow taxpayers to report any change in status (dependents, income) throughout the year. These families will be able to use the portal in the coming months to make sure their information is correct, including adding any 2021 babies as qualified dependents. 

Because payment eligibility is based on your child’s age on Dec. 31, monthly checks will not be prorated. All children (who meet all other qualifications) born on or before Dec. 31, 2021, will receive the full $3,600 tax credit. And parents of twins can get up to $7,200. The only variation will be in the timing of each check. Let’s walk through a few examples:

  • Babies and children born before 2021: You don’t have to do anything to receive child tax credit payments (unless you don’t usually file taxes at all).
  • Babies born between January and July of 2021: If the child is reported in the IRS portal before the first check is sent in July, checks will follow the usual timeline shown in the chart above. However, the IRS hasn’t added a section to its portal to add new dependents.
  • Babies born between July and November of 2021: If the first check has already gone out by the time you register, you’ll receive all subsequent monthly checks, with the remainder coming with your tax return next spring.
  • Babies born in December 2021: After the last check is sent, you will no longer need to use the web portals. Instead, you’ll receive the full $3,600 amount when you file taxes in 2022 and claim your new dependent there.
  • Babies born in 2022 and beyond: Unless the expanded child tax credit is extended for next year, 2022 babies will not be receiving monthly checks or the full 2021 amount of $3,600. That means that a baby born on Dec. 31 is eligible, while a baby born Jan. 1 is not. This is how the child tax credit has worked in the past as well.

When will child tax credit payments arrive?

Unlike stimulus checks, the expanded child tax credit will be paid out in two distinct phases. Half your child tax credit total will arrive as monthly checks, which will be sent out beginning July 15 and continuing through December on the 15th of every month (except in August, when checks arrive on the 13th because the 15th falls on a weekend). The other half will be paid out on your 2021 tax return when you file in 2022. Anyone who qualifies and filed a 2020 return by this year’s May 17 tax deadline will begin receiving monthly checks automatically — no need to file, claim, request or otherwise hunt down your money, as long as the IRS knows how many dependents you have. 

Child tax credit payment schedule

Monthly Maximum payment per child 5 and younger Maximum payment per child; 6 to 17
Jul 15: First 2021 check $300 $250
13-Aug $300 $250
15-Sep $300 $250
15-Oct $300 $250
15-Nov $300 $250
Dec 15: Last 2021 check $300 $250
Apr 2022: Second half of payment $1,800 $1,500

 
If you don’t opt out of the advance monthly payments, you’ll still receive the money starting July 15. Even though the deadline to unenroll for July’s payment has passed, new parents can still opt out before Aug. 2. If you opt out now, you’ll receive the child tax credit money in one lump sum with next year’s tax return. New parents can use the Child Tax Credit Update Portal to check eligibility and unenroll. 

What else could affect my child tax credit eligibility?

One important caveat is that both you and your child must be US citizens and your child needs a Social Security number. And another: Your child’s age group is based on their age on Dec. 31, 2021, so anyone aging into the next payment bracket at any point in 2021 will be considered a part of that group for the entirety of the year. (Got a 5-year-old turning 6 this year? Unfortunately, you may be out about $600.)

We’ll keep this story updated as new information emerges about the expanded child tax credit. Still have unanswered questions? Here’s every important detail to know about the child tax credit, 2021 income limits, how shared custody could impact your child tax credit payments and a timeline for monthly payments. And here’s everything we know so far about a potential fourth stimulus check and nine weird facts about stimulus checks that you should know about.