The first advance child tax credit arrives this month. Here's everything you need to know


More than 36 million families will have a little extra money in their bank accounts this month as the first advance child tax credit (CTC) is scheduled to be paid out on July 15.

The enhanced payments, established by the American Rescue Plan Act earlier this year, are worth up to $3,000 per child ages 6 to 17 and $3,600 annually for children under 6 in 2021.

Eligible families will receive half of their credit in the form of monthly payments of up to $250 per school-age child and up to $300 per child under 6 from July through December 2021. The other half will be paid in a lump sum when parents file their 2021 taxes next tax season.

Many parents have been anticipating the checks. Here's what to know about the payments.

Who is eligible for the enhanced child tax credit?

Americans with dependent children 17 and under who have a Social Security number are eligible for the new credit if they meet income requirements. The IRS estimates that almost 90% of families with children in the U.S. are eligible. Filers with adjusted gross incomes below the following levels will qualify for the full monthly payment:

  • $75,000 for individual taxpayers
  • $112,500 for heads of household
  • $150,000 for married taxpayers filing jointly, and widows/widowers

From those thresholds, the credit is reduced by $50 for every additional $1,000 of adjusted gross income earned. The credit provided to those with a child ages 6 to 17 will phase out completely for individuals earning $95,000 and those making $170,000 and filing jointly. 

Parents with no income, or little income, are still eligible for the payments. Families who don't normally file a tax return can register with a new online tool from the IRS to ensure they get their checks in the months to come.

Families earning up to $200,000 (or $400,000 for married couples filing jointly) will still be able to claim the standard $2,000 per child credit.

How will they be paid out?

The IRS will send out most of the payments by direct deposit, using the banking information it has on file from the latest tax season.

Those who are not enrolled for direct deposit will receive a check, which could delay the arrival of the payments.

When will they be paid out?

With one exception, the payments will be made on the 15th of each month from July to December 2021:

  • July 15
  • Aug. 13
  • Sept. 15
  • Oct. 15
  • Nov. 15
  • Dec. 15

The rest of the credit will be paid in a lump sum when you file your 2021 tax return.

Can I change my direct deposit information?

Yes. Families can now update their bank account information through the IRS's Child Tax Credit Update Portal on the agency's website. While any updates will not affect the first payment in July, any changes made by Aug. 2 will apply to the Aug. 13 payment and all subsequent monthly payments.

Families can only receive the payments to a single bank account; they can not be split up.

Will I owe any of the money back to the IRS?

It is possible. These payments are really 2021 tax credits that the IRS is prepaying to families.

If your family situation changes — say, one of your children turns 18 this year, or if you qualify based on 2020 income but your family earns more this year — then you could owe money to the IRS next tax season.

How do I unenroll in the advance payments?

In some cases, it makes sense for families to unenroll in the automatic payments. Some may prefer to receive the entire credit at once when they file their 2021 return, or they may know that they will no longer qualify for the CTC when they file their 2021 return, as noted above.

Families must opt out using the IRS's online portal. For those who are married and filing jointly, both spouses must unenroll. Below is the schedule of the last day to unenroll each month.

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