When Parents Could Get the Expanded $3000 to $3600 Child Tax Credit (CTC) Stimulus – $250 to $300 Monthly Allowance from July 2021

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This article was last updated on March 12

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2021 Child Tax Credit Stimulus

In response to providing support to families during the COVID pandemic, President Biden and the Democrats passed legislation via the American Rescue Plan (ARP) Stimulus package to expand the current Child Tax Credit (CTC) to $3,000 annually per child (or $250 monthly) between the ages of 6 and 17, while increasing it to $3,600 for children under the age of 6 (infants), equivalent to $300 monthly. The IRS will make these payments on a monthly basis versus eligible recipients having to claim the credit via their tax return on an annual basis.

Currently the CTC is $2,000 per eligible dependent child under the age of 17. The credit begins to phase out for those whose incomes (AGI) is above $200,000 (singles)/$400,000 (joint return). Up to $1,400 of the child credit is refundable for some lower-income individuals with children, but these people must also have earned income of at least $2,500 to get a refund. The Biden expansion will raise the maximum benefit by 80% per child for most families and extends it to millions of families whose earnings are too low to fully qualify under existing law. Currently, a quarter of children get a partial benefit, and the poorest 10% get nothing.

More than 93 percent of children — 69 million — would receive benefits under the expansion of the Child Tax Credit Payments in 2021. Unlike the current CTC which is claimed via tax returns annually, as a tax reduction to families with income tax liability or a refund check, the expanded CTC stimulus would send monthly checks to provide a more immediate impact or stimulus in 2021

2021 CTC Changes and Expansion under Stimulus Plan

The new Biden stimulus package would make the following temporary changes to the CTC payments in 2021

  • Expands eligibility to 17-year-old children (vs 16 or under per current CTC rules). This means children under the age of 18 as of the end of 2021 (last day of the tax year) would be eligible for this advance refundable credit.
  • Increase the credit to $3,000 per child older than 6 and $3,600 per child under the age of 6.
  • Remove the $2,500 earned income minimum requirement.
  • The expanded CTC stimulus is a fully refundable tax credit
  • Half of the credit to be paid in advance between July 2021 to December 2021 (you would need to show the partial payments in your 2021 tax return filed next year).

Note that the above payment would be in addition to the $1,400 dependent stimulus check (economic impact payment) that is also in the latest stimulus bill. So in total some families could be getting close to $5,000 per child in 2021 with these two payments! See more in this video on how some families could get up to $10K with these credits. A similar expansion is also proposed to the Earned Income Tax Credit (EITC).

CTC Income Qualification Thresholds

The amount of the credit allowable shall be reduced by $50 for each $1,000 (or 5% of credit) for Taxpayer’s Income (MAGI) exceeds the maximum credit threshold amount.

2019 or 2020 Tax Filing StatusIncome Below Which Full CTC Is Paid (5% Phase-out applies after this)
Single or Married filing separate$75,000
Head of household$112,500
Married filing jointly$150,000
2021 CTC Stimulus Income Qualification Thresholds

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2020 or 2019 Tax Year Data Used to Figure Eligiblity

The IRS will use the most recent of your 2019 or 2020 tax data (file your tax return via TurboTax) to ensure the latest dependent and payment information can be used. However any dependent 18 or younger at the end of 2021 is eligible for the expanded CTC, which is considered an advanced refundable credit against your 2021 taxes. You won’t have to pay taxes on it, but can also be claimed in your 2021 return as a recovery rebate credit if you don’t get it for some reason this year.

Families that aren’t eligible expanded CTC due to income levels or other reasons would still be able to claim the regular CTC credit of $2,000 per child, less the amount of any monthly payments they got, provided their 2020 AGI is below the current thresholds ($200,000/$400,000).

When Could the Child Tax Credit Stimulus Payments Start from the IRS?

It will take a massive effort by the IRS, under the purview of the Treasury Department, to make these payments from the planned start date for July 2021. Especially given their older systems and already over stretched staff. With a tax season to complete and millions of stimulus checks to pay out, it will like take several months to get monthly payments out to eligible recipients, so expect delays and most likely retroactive payments will need to be made to catch people up for any missed months.

For example, a family with three dependent kids ages 16, 12 and 5 earning less than $120,000 would get up to $800 per month from the IRS from July through December 2021, for a total of $4,800. 

Further the monthly payments are only planned for the remainder of this year (50% of total), but could be extended in to 2022 or claimed via tax returns, like the current CTC is. Note that the monthly payments could be optional and for those that prefer, they could just claim this via their 2021 tax returns as well.

How Will Payments be Made?

While the IRS not issued formal guidance yet, they will strongly recommend getting paid via direct deposit as could take several weeks if you choose to get paid via checks in the mail. Your latest tax return payment details will likely be used for making these payments.

According to the ARP stimulus plan, the IRS is required to create an online portal that will allow people (especially for non-filers with no recent tax returns) to update their income, marital status, and number of children who qualify for the credit. That portal will also allow you to opt out of the periodic payments if you want to take the full child credit on your tax return. But again, this could take several months to get going and ensure the right safe guards are in place to prevent the widespread fraud reported with many of the stimulus programs (especially the PUA unemployment program)

What if my child turns 18 in 2021? Will they get the credit?

No. They have to be under 18 at the end of 2021. Since this is refundable 2021 tax credit, paid in advance, it would only cover dependents under the age of 18 on the last day of the tax year.  The IRS will issue final guidelines on this soon, but I expect this to be the case as with other child credits.

Will payments be made in 2022?

At this stage the expanded CTC s only for single year – 2021, with monthly payments through to the end of the year. Democrats do want to make it permanent given the wide spread safety net to lower and middle class families, but at a cost of $100 billion per year it will be hard to get approval in Congress for ongoing funding, especially when the Pandemic has receded.

21 thoughts on “When Parents Could Get the Expanded $3000 to $3600 Child Tax Credit (CTC) Stimulus – $250 to $300 Monthly Allowance from July 2021

  1. What if my child turns 6 in august 2021? Will we get $250 or $300 per month for him?

  2. My ex and I share claiming our son as dependent (I get even years and he gets odd). Since this credit is based on 2021, and I don’t claim our son that year, would I still get monthly payments in 2020 (and possibly pay back anything over 2K) or would my ex get it in 2021 (not monthly advance payments because our son isn’t on ex’s 2020) or would we *both* get the credit? Also, can I get my son’s stimulus payment for now even if they went by my 2019 and didn’t give it to me because my 2020 wasn’t in yet? I can’t claim this via recovery rebate in 2021 because he won’t be my dependent that year. Can I fix that at the IRS website or, again, does my ex just get it because it was 2019.

  3. I am wondering about the $1400 stimulus for dependent children. I received $1400 for myself, however I did not get anything (yet) for my 2 dependent children. Are the $1400 stimulus payments for children staggered in over time, and when should we expect to see those payments ($2800)? Thank you!

  4. What if I am on social security and me and my husband are separated but i have full custody? My husband has been getting all the checks for my child cause I have no where to say I full custody since I font file taxes? Any advice for those monthly payments?
    Ace

  5. I’ve been looking for that answer as well. G-Daughter turns 18 in April. Still in high School. Can anyone answer our question?

    1. Based on the legislative text and as this is an advance credit on your 2021 taxes, it would be the age of your child at the end of 2021 tax year (December 31st, 2021). Like other credits. So if your daughter is older than 18 then she may not qualify for the expanded payment. However will need to wait for final IRS guidelines to confirm this and they make an exception.

  6. I have already filed 2020 taxes and received the original $2000 CTC for my two children, however I’m pregnant and due in July when the new CTC money disbursements are supposed to hit. Can I expect the $3600 and the $1400 for the new baby when I file in 2022? and does this mean that I will only recieve half for my other two children if I recieve mo they payments for them this year?

    1. Yes for 2022, you should be able to claim your new child this year and the $1400 dependent stimulus. For your other kids you will get 50% of the CTC this year and $1400 per kid, so next year you will get the remaining CTC + higher EITC.

  7. What about a child who turns 18 in August 2021? She will be on college

    1. Based on the legislative text and as this is an advance credit on your 2021 taxes, it would be the age of your child at the end of 2021 tax year (December 31st, 2021). Like other credits. So if your daughter is older than 18 then she may not qualify for the expanded payment. However will need to wait for final IRS guidelines to confirm this and they make an exception.

  8. Hello, i have not been getting the tax relief checks for my children , just my husband and I . What do i need to do before the next round comes out ? Can you tell me what papers are needed to be filled out ,or who do i call? I did get the first round for them , but not after that. PLEASE HELP……

    1. Did you file a tax return for this year or have a change in dependent status? You can claim the missing dependent payments from last year via a recovery rebate credit. For the new CTC, the IRS will use your 2019 or 2020 tax data to send the monthly advance payments.

  9. Just asking.? I’m a gma who has raised 6 grand babies for about 20yrs .I’ve got a grandparent Tanaf.on the youngest receive. One hundred a month. I have a grandchild whom filed her taxes last yr.claimed me as dependent and claimed her lil brother. Not aware of amount her refund,was. So I lucked out on any stimulus relief. I’m Unemployed .health issues.will this round help me in anyway. Just wondering.

  10. Would a child born in the first quarter of 2021 be eligible for a stimulous check? How would parent apply for it since she is not on 2020 tax return. How would parent apply for the child tax credit for this child?

  11. Hi Andy,
    Just curious. My tax individual at H&R Block has already filed my income tax. will this cause me to v=be ineligible for EITC and CTC? in 2021? and what amount do you have to make to qualify in regular payroll wages for EITC? What if my tax guy was unaware of this new roll out.
    You are so awesome by the way. The only form of information I have #1 had and #2 feel I can trust.

    1. No. Your 2020 tax return filing should not impact your 2021 payments as they will be reconciled against your 2021 tax return in 2022. The one thing that may impact you is the amount you get, because if your income substantially increased in 2020 it could lower or disqualify you from getting paid. But Congress has yet to release final details and I suspect they may allow you use 2019 or 2021 income. If you want to use your 2021 income you will have to wait till 2022 to claim these credits as a lump sump.

  12. Hello I am in California and I am still (pua) payments from December 27,2020-now. I have a $0 balance but the ending date (4/13/21). This is very frustrated and I have submitted all required documentation as request, still no call (it has been over 5 days since calling the last time). My claim was (rushed) but still nothing, they really need more staff. Don’t they have a COMPLIANCE team/dept, I know about claims and processing (I worked for Sutter as: Data entry,Claims 1,2&3 specialist and research specialist, on to auditing/compliance dept.

    I have worked most of my life and I did not think I would be ignored like this, when there is a great need

  13. I wish they go by 2020 tax year because my child turns 18 this year. Although, he will still need full financial support as he will be a full time student in college. I just hope we get to take advantage of that credit too.

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