If your baby has a 2021 birthday, there's one extra step to claiming your child tax credit payments.
Sarah Tew/CNETHaving a new baby during a pandemic is difficult to begin with, but new parents now have the added onus of trying to decipher the expanded child tax credit rules for 2021. In previous years, the child tax credit was much smaller, and parents would claim their children on their tax return and receive the credit as part of their refund. But things are different in 2021.
Most notably, the credit is now $3,600 for eligible children under age 6 and $3,000 for older children. And the other major change is to the payment schedule: The IRS is now automatically sending monthly checks directly to qualifying families (unless you opt out), so payments will arrive much sooner. This is great news for parents who need the money now, but it's confusing for people with new babies born in 2021 (and even more confusing for expectant parents of future 2022 babies).
Parents of 2021 babies have one extra step to take, compared with other parents, at least if you want to begin receiving child tax credit checks this year. We'll walk you through your eligibility and how to use the IRS web portals to claim your payments. Read on to learn more about how the portals work, and how to use them to claim the credit for babies born or adopted in 2021, or any new dependents who weren't listed on your 2020 return. Plus, here's how to claim an additional $8,000 to $16,000 credit for child care expenses and what we know about a fourth stimulus check.
How much is the expanded child tax credit worth for new parents?
The new child tax credit for 2021 newborns will be capped at $3,600 per eligible child, going down from there as your income goes up. The IRS uses different AGI phaseout limits (when your income is too high to qualify for the full amount of the credit) for single filers, heads of household and married couples filing jointly. CNET built a calculator for determining your specific payment eligibility, which you should definitely try out, especially if you also have older children (kids 6 and up qualify for less), share custody or don't hold U.S. citizenship.
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When will my child tax credit payments actually arrive?
Unlike stimulus checks, the expanded child tax credit will be paid out in two distinct phases. Half your child tax credit total will arrive in monthly checks, which will be sent out beginning July 15 and continuing through December on the 15th of every month (except in August, when checks arrive on the 13th because the 15th falls on a weekend). The other half will be paid out on your 2021 tax return when you file in 2022. Anyone who qualifies and filed a 2020 return by this year's May 17 tax deadline will begin receiving monthly checks automatically -- no need to file, claim, request or otherwise hunt down your money, as long as the IRS knows how many dependents you have.
Child tax credit payment schedule
| Monthly | Maximum payment per child 5 and younger | Maximum payment per child; 6 to 17 |
|---|---|---|
| July 15: First 2021 check | $300 | $250 |
| Aug. 13 | $300 | $250 |
| Sept. 15 | $300 | $250 |
| Oct. 15 | $300 | $250 |
| Nov. 15 | $300 | $250 |
| Dec. 15: Last 2021 check | $300 | $250 |
| April 2022: Second half of payment | $1,800 | $1,500 |
OK, but how can parents of 2021 babies claim the child tax credit?
If your dependents haven't been reported to the IRS by July (or haven't even been born yet), you have two options for receiving your payment. First, you could always wait until you file your return next spring and receive the entire child tax credit in one lump sum, just like how the former version of the credit worked. But if you'd like to receive monthly payments before next year's tax season rolls around, there's another option.
The first chunk of child tax credit payments will arrive monthly, beginning in July and continuing through December.
Sarah Tew/CNETThe IRS has set up two online portals for special cases like this one. The Child Tax Credit Update Portal will allow taxpayers to report any change in status (dependents, income) throughout the year. These families can use the portal to make sure their information is correct, including adding any 2021 babies as qualified dependents.
Because payment eligibility is based on your child's age on Dec. 31, monthly checks will not be prorated. All children born on or before Dec. 31, 2021 (who meet all other qualifications) will receive the full $3,600 tax credit. The only variation will be in the timing of each check. Let's walk through a few examples:
- Babies and children born before 2021: You don't have to do anything to receive child tax credit payments (unless you don't usually file taxes at all).
- Babies born between January and July, 2021: If the child is reported in the IRS portal before the first check is sent in July, checks will follow the usual timeline shown in the chart above.
- Babies born between July and November, 2021: If the first check has already gone out by the time you register, you'll receive all subsequent monthly checks, with the remainder coming with your tax return next spring.
- Babies born in December, 2021: After the last check is sent, you will no longer need to use the web portals. Instead, you'll receive the full $3,600 amount when you file taxes in 2022 and claim your new dependent there.
- Babies born in 2022 and beyond: Unless the expanded child tax credit is extended for next year, 2022 babies will not be receiving monthly checks or the full 2021 amount of $3,600. That means that a baby born on Dec. 31 is eligible, while a baby born Jan. 1 is not. This is how the child tax credit has worked in the past as well.
What else could affect child tax credit payments and eligibility?
One important caveat is that both you and your child must be US citizens and your child needs a Social Security number. And another: Your child's age group is based on their age on Dec. 31, 2021, so anyone aging into the next payment bracket at any point in 2021 will be considered a part of that group for the entirety of the year. (Got a 5-year-old turning 6 this year? Unfortunately, you may be out about $600.)
We'll keep this story updated as new information emerges about the expanded child tax credit. Still have unanswered questions? Here's every important detail to know about the child tax credit, 2021 income limits, how shared custody could impact your child tax credit payments, and a timeline for monthly payments. And here's everything we know so far about a potential fourth stimulus check and nine weird facts about stimulus checks that you should know about.
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