The Child Tax Credit and Payments to Parents and Caregivers

If you are a par­ent or care­giv­er who has filed tax­es before, you may already be famil­iar with the child tax cred­it, which most par­ents claim on their annu­al income tax return. For years, it has pro­vid­ed an after-the-fact cred­it for fam­i­lies with children.

What’s new is that from July through Decem­ber 2021, for most par­ents, half of your cred­it is being advanced to you dur­ing the year in the form of direct bank account pay­ments, so you don’t have to wait until it’s time to file your tax­es to make use of these resources to pro­vide for you and your fam­i­ly. This is the ​“advance” child tax cred­it you might have heard about in the news. You’ll still get the oth­er half of your cred­it the usu­al way, as part of fil­ing your fed­er­al tax­es next April. The Annie E. Casey Foun­da­tion has a 20-year his­to­ry of bipar­ti­san advo­ca­cy for expand­ing the cred­it to help fam­i­lies meet basic needs for their kids.

When Did Pay­ments Start? How Much Are They For?

The pay­ments began July 15, 2021. You’ll receive one per month. For each of your qual­i­fy­ing chil­dren age 5 or younger, most par­ents were sched­uled to receive $300 per month in July, August, Sep­tem­ber, Octo­ber, Novem­ber and Decem­ber for a total of $1,800. For each of your qual­i­fy­ing chil­dren ages 6 to 17, most par­ents were sched­uled to receive $250 each month for a total of $1,500. The ben­e­fit is time-lim­it­ed, but in the 2021 KIDS COUNT^® Data Book, the Foun­da­tion urged pol­i­cy­mak­ers to make the cred­it permanent.

How Do I Receive These Pay­ments to Pro­vide for My Family?

Eli­gi­bil­i­ty is based on last year’s tax infor­ma­tion and almost all par­ents are eli­gi­ble. If the IRS already has your infor­ma­tion on file from when you’ve received tax refunds or stim­u­lus pay­ments, the advance child tax cred­it should be appear­ing in your account auto­mat­i­cal­ly. If it isn’t, vis­it child​tax​cred​it​.gov to find out what to do next.

There’s a spe­cial web­site for par­ents and care­givers who are eli­gi­ble, but who did not file tax­es last year. It’s called the Non-fil­er Sign-up Tool.

Why Are These Pay­ments Being Made?

It costs almost a quar­ter mil­lion dol­lars to raise one child in the Unit­ed States from birth to age 18. And the COVID-19 pan­dem­ic brought new uncer­tain­ty and insta­bil­i­ty to par­ents try­ing to make ends meet. Amer­i­ca doesn’t recov­er unless Amer­i­can fam­i­lies recov­er, so the advance child tax cred­it was includ­ed in the Amer­i­can Res­cue Plan as one tool to pro­vide fam­i­lies with the sup­port they need to care for their chil­dren and to pow­er an equi­table eco­nom­ic recovery.

Where Can I Learn More?

Vis­it the U.S. government’s offi­cial child tax cred­it site for more infor­ma­tion: child​tax​cred​it​.gov.

More Infor­ma­tion About the Child Tax Credit

The Annie E. Casey Foun­da­tion has strong­ly advo­cat­ed for decades for the fed­er­al child tax cred­it as a pol­i­cy tool to ensure chil­dren and fam­i­lies can thrive. The Foun­da­tion has dis­cussed the ben­e­fits of the child tax cred­it in pre­vi­ous edi­tions of the Data Book and includ­ed the expan­sion of the cred­it as its first rec­om­men­da­tion in a key­stone report on two-gen­er­a­tion approach­es to com­bat­ing child poverty.