Parents, check your bank accounts on Friday, Aug. 13. That’s when the second installment of the advance child tax credit payments are scheduled for direct deposit. If the IRS doesn’t have your direct deposit information, you’ll receive your payment by check.
With the first round of advance child tax credits, funds were generally available to bank and credit union customers at 9 a.m. local time.
How Much Are the Payments?
Parents with children younger than 6 will receive a total credit of $3,600. Half of those payments will be made in monthly installments of $300 a month over six months, while the remaining $1,800 will be paid as a credit when you file your tax return in 2022.
The credit for children ages 6 to 17 is $3,000. Parents will receive $250 a month over six months, then receive the remaining $1,500 next year at tax time.
How Do I Know if I Qualify?
If you received the first round of child tax credits in July, you should receive the remaining four payments. You’re eligible for the full amount of the credit for each dependent child who will be 17 or younger on Dec. 31, 2021. The credit begins to phase out at the following income levels:
- $75,000 for single filers
- $112,000 for heads of household
- $150,000 for married couples filing a joint return
A child is considered your dependent if you provide more than half of their support for the tax year.
You can use the child credit update portal on the IRS website to verify that your payment has been scheduled. The IRS also sent letters to 36 million families notifying them that they’re eligible for the credits before the first payments went out in July.
What if I Didn’t Get the First Credit?
If you haven’t filed taxes for 2019 or 2020 and you didn’t receive the stimulus checks, you may need to use the non-filer tool to register.
There are a few other circumstances where you’d need to take action. For example, if you had a child in 2021, you’ll need to enroll to receive advance payments. Otherwise, you’ll have to wait and receive the full credit when you file next year’s return. Likewise, if you had a child in 2020 but the IRS used your 2019 return to determine your credit, you also may need to enroll.
Currently, there’s no way to add dependents. However, the IRS says it will feature an option on its website to do so later this summer.
When Will I Get the Other 4 Payments?
The remaining four payments will be made on the following schedule, according to the IRS.
- Sept. 15
- Oct. 15
- Nov. 15
- Dec. 15
Can I Opt Out of the Advance Child Credit?
Parents can opt out of receiving the advance credits if they’d rather receive a larger tax refund next year. If your income was below the phase-out thresholds in 2020 or 2019 but you expect it to be above these levels in 2021, you might want to opt out of the advance payments to avoid owing part of the money back next year.
It’s too late to opt out of August’s credit, but you can use the update portal to opt out of future advance payments. The deadline for opting out of the Sept. 15 payments is Aug. 30.
Robin Hartill is a certified financial planner and a senior writer at The MM7. She writes the Dear Penny personal finance advice column. Send your tricky money questions to [email protected]