2021 Child Tax Credit
Which children qualify?
For tax year 2021, a qualifying child is an individual who does not turn 18 before January 1, 2022, and who satisfies the following conditions:
- The individual is the taxpayer’s son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of any of them (for example, a grandchild, niece, or nephew).
- The individual does not provide more than one-half of his or her own support during 2021.
- The individual lives with the taxpayer for more than one-half of tax year 2021. For exceptions to this requirement, see IRS Publication 972, Child Tax Credit and Credit for Other Dependents.
- The individual is properly claimed as the taxpayer’s dependent.
- The individual does not file a joint return with the individual’s spouse for tax year 2021 or files it only to claim a refund of withheld income tax or estimated tax paid.
- The individual was a U.S. citizen, U.S. national, or U.S. resident alien.
How much is the 2021 Child Tax Credit?
Child <6 years old $3,600 per qualifying dependent
Child 6 to 17 years old $3,000 per qualifying dependent
Income test 1
$150,000 MAGI MFJ, QWidow(er)
$112,500 MAGI HOH
$75,000 MAGI Single
Modified AGI in excess of the applicable amounts above causes eligible CTC to be reduced by $50 for every $1,000 until the CTC is limited to $2,000 per qualifying beneficiary.
Income Test 2 (CTC starts at $2,000 per qualifying dependent)
$400,000 MAGI MFJ, QWidow(er)
$200,000 MAGI all other filing statuses
$2,000 CTC is reduced by $50 for every $1,000 until CTC eligibility is eliminated.
What is the effect of the Advance CTC payments?
Any Advance Child Tax Credit payments received in 2021 will be subtracted from the total amount of eligible CTC (see above) to determine the remaining amount of CTC to be received on the eligible 2021 income tax return.
How much advance payment did I receive?
See IRS letter 6417 for the amount you were to receive and letter 6419 received in January 2022 reflecting the total payments you received. You must provide letter 6419 to us. If the incorrect amount of Advance Child Tax Credit is reported on your tax return it will dramatically delay the receipt of any additional refund to which you are entitled. If you cannot locate letter 6419 download a copy of your 2021 account transcript from the IRS.
With no Advance CTC payments authorized for 2022 what can a taxpayer do?
File 2021 tax returns as early as possible to expedite receiving the remaining credit to which they are entitled. Be sure a correct tax return is filed reflecting the correct dependents. Tax returns reflecting incorrect information or information that conflicts with another taxpayer's filing will cause delays. Don't forget to include the third stimulus payment received in early 2021.
Estimate 2022 income and the income tax liability. Adjust withholding from paychecks to only cover the expected amount of 2022 income tax less the expected CTC, so more cash is available in the weekly paycheck rather than waiting for a large refund next year.