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Everything you need to know about the Child Tax Credit

Posted on July 16, 2021

The expanded and newly-advanceable Child Tax Credit was authorized by the American Rescue Plan Act, enacted in March, 2021. Normally, the IRS will calculate the payment based on a family’s 2020 tax return, including those who use the Non-filer Sign-up Tool. However if that return is not available because it has not yet been filed or is still being processed, the IRS will instead determine the initial payment amounts using the 2019 return or the information entered using the Non-filers tool that was available in 2020.

The payment will be up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 through 17.

The Treasury Department and the Internal Revenue Service wants those who quality to take advantage of the Child Tax Credit special monthly advance payments scheduled to begin on July 15.

You can find information on the new Child Tax Credit Eligibility Assistant on IRS.gov. By answering a series of questions about yourself and family members, families can quickly determine whether they qualify for the credit.

Although anyone can use this tool, it may be particularly useful to families who don’t normally file a federal tax return. The eligibility assistant works in concert with other features on IRS.gov to help people receive this important credit. The IRS is working hard to deliver the expanded Child Tax Credit, and will be rolling out additional help for taxpayers in the near future.

Step 1:

Visit IRS.gov/childtaxcredit2021 for the most up-to-date information about the credit and the advance payments. Among other things, the page already features a link to:

  • Non-filer Sign-up Tool
  • Child Tax Credit Eligibility Assistant
  • Child Tax Credit Update Portal

For security reasons, the Child Tax Credit Eligibility Assistant does not request any personally-identifiable information for any family member.

Step 2:

After checking the Eligibility Assistant, Non-filer Sign-Up Tool is available to help those who don’t normally file tax returns. This tool, an update of last year’s IRS Economic Impact Payment Non-filers tool, is also designed to help eligible individuals who don’t normally file tax returns register for the $1,400 third round of Economic Impact Payments (also known as stimulus checks) and claim the Recovery Rebate Credit for any amount of the first two rounds of Economic Impact Payments they may have missed.

What you will be asked for:

  • Name, address, and social security numbers
  • Qualifying information about their children age 17 and under, their other dependents
  • Direct deposit bank information so the IRS can quickly and easily deposit the payments directly into their checking or savings account.
  • This is available only ongov.

The Non-filer Sign-Up tool should not be used by anyone who has already filed a 2019 or 2020 federal income tax return.

Step 3:

  • No action needed by most other families. Those who already filed or plan to file 2019 or 2020 income tax returns should not use the Non-filer Sign-Up Tool.
  • Once the IRS processes their 2019 or 2020 tax return, the information will be used to determine eligibility and issue advance payments.
  • Families who want to claim other tax benefits, such as the Earned Income Tax Credit for low-and moderate-income families, should not use this tool and instead file a regular tax return. For them, the fastest and easiest way to file a return is the Free File system, available only ongov.

Step 4:

The IRS urges everyone to be on the lookout for scams related to both Advance Child Tax Credit payments and Economic Impact Payments.

Watch out for scams using email, phone calls or texts related to the payments. Remember, the IRS never sends unsolicited electronic communications asking anyone to open attachments or visit a non-governmental web site.

Community partners can help

The IRS is urging community groups, non-profits, associations, education organizations and anyone else with connections to people with children to share this critical information about the Advance Child Tax Credit as well as other important benefits.

If you know of someone needing assistance in obtaining information related to the Advance Child Tax Credit, give us a call. We will be happy to provide assistance and answer questions.