How much is the Child Tax Credit?
- The Credit per child is as follows:
- $3,600 for children ages 5 and under at the end of 2021; and
- $3,000 for children ages 6 through 17 at the end of 2021.
Am I eligible for the Child Tax Credit?
The income limitation has two different phase out tiers for the CTC based on your modified adjusted gross Income (“MAGI”)
Tier 1 Phase out
The CTC above a $2,000 credit starts to phase out based on the below MAGI amounts”
- $150,000 if married and filing a joint return or if filing as a qualifying widow or widower;
- $112,500 if filing as head of household; or
- $75,000 if you are a single filer or are married and filing a separate return.
Tier 2 Phase out
The Child Tax Credit won’t begin to be reduced below $2,000 per child until your modified AGI in 2021 exceeds:
- $400,000 if married and filing a joint return; or
- $200,000 for all other filing statuses.
What is the Advance Payment of the CTC?
The IRS is sending advance payments of half of the CTC during 2021. The other half will be claimed on your 2021 income tax return.
Do I Qualify for the Advance Payment of the CTC?
https://www.irs.gov/credits-deductions/child-tax-credit-update-portal
Use the above link to check if your enrolled for advance payments. Further you can update your 2021 MAGI which is important if your 2021 MAGI has changed from your 2020 MAGI.
Should unenroll for the Advance Payments?
If you income is near the phase out levels and your income has increased from 2020, you may want to unenroll to prevent the possibility of owning tax payments with your return.