[December 2022 update] Despite attempts by Democrats to restore the CTC to expanded pandemic levels, it is unlikely a funding bill will be passed before the end of the year. As a result the CTC will return to pre-pandemic levels and can only be claimed via your tax return filing.
[2022 April Update] With the 2022 tax filing season now done families should have gotten their official IRS CTC payment notice (a.k.a Letter 6419) required for filing their tax return.
This letter from the IRS provides all the official payment and coverage details around the advance child tax credit that will be helpful for your tax return filing.
Since 50% of the CTC payments in 2021 were an advance payment on what you normally would get paid via your 2021-2022 tax filing, you may have to pay more in taxes (or get a lower refund) if your income was much higher than in your past tax returns or submitted CTC portal information, which is what the IRS used to estimate your payment.
The IRS has however noted issues with some of the reconciliation 6419 letters, where the amounts paid don’t line up with IRS system data or if filers don’t account for spousal payments in their joint returns
This has caused several filers to experience extended delays for their refund payments which contain the remaining CTC payment, due to the IRS having to reconcile and adjust payments. See more in this article for this.
With payment of the expanded and advance Child Tax Credit (CTC) underway, many parents and guardians with dependents over 18 are feeling like they are missing out on the government largesse going to children. But there is some relief for this group, beyond what was provided in the last round of dependent stimulus checks.
Without getting into the politics of it, the logic for limiting the CTC is that families with young kids have a harder time finding and going to work (e.g. due to childcare) so need the government money more. Those with older dependents have more flexibility and adult dependents can work if they need more money! Unfortunately disabled adult dependents get left out.
But the good news is that there is an additional $500 payment available for other or adult dependents. To get the $500 payment, claimed via your tax return, your dependent needs to meet the following criteria per the IRS:
- Dependent is 17 or older as of the start of the tax year and not claiming the child tax credit or additional child tax credit.
- While some dependents may qualify for the expanded CTC and this extra payment (e.g 17 yr old’s in 2021), most dependents who the $500 other dependent credit won’t get the regular CTC.
- Dependent has a tax filing number (e.g. a SSN) and is a U.S. citizen, national or resident alien.
- The qualifying dependent could be the tax payer’s parent or qualifying relatives AND is supported by the taxpayer. This means no age limit on qualifying for this payment.
- Covers dependents living with the taxpayer who aren’t related to the taxpayer.
- The claiming taxpayer’s income is below $200,000 (single) or $400,000 (married). The taxpayer gets the dependent credit, not the dependent themselves, so it’s their income (AGI) that is used for qualification.
The IRS has provided a useful tool to help taxpayers determine if they qualify for this credit, in addition to others like the EITC, which I would recommend reviewing if you are unsure around qualification ahead of filing your tax return.
Note that unlike the advance CTC which is being paid monthly in 2021, the $500 adult dependent credit can only be claimed when filing your next tax return.