Tax Breaks

Child Tax Credit Payment Schedule for the Rest of 2021

The IRS has already sent three batches of monthly child tax credit payments. Here's when you can expect the rest of your payments.

Parents who are struggling financially are thrilled when they receive a child tax credit payment. For families that received their first payment in July, getting up to $300-per-child each month can mean the difference between poverty and survival for some families (parents who started receiving payments later could receive even more each month). While Americans had to wait several months for their first payment to arrive, additional payments are now being sent every month through the end of the year.

The IRS sent the third round of child tax credit payments to approximately 35 million families on September 15. More payments will follow each month through the end of the year according to the schedule below. As it stands right now, the payments won't continue into 2022. However, President Biden and many Congressional Democrats want to extend them beyond this year. So, there's a chance the IRS will still be sending monthly payments next year, too.

Schedule of 2021 Monthly Child Tax Credit Payments

PAYMENT

DATE

1st Payment

July 15, 2021

2nd Payment

August 13, 2021

3rd Payment

September 15, 2021

4th Payment

October 15, 2021

5th Payment

November 15, 2021

6th Payment

December 15, 2021

How Much Will Your Child Tax Credit Payment Be Each Month?

The monthly payments are simply an advance of the child tax credit you would otherwise claim on your 2021 tax return. In most cases, if you receive all six payments this year (i.e., from July to December), the combined total of all your payments will equal 50% of the credit you're expected to qualify for on your 2021 return. You'll then claim the other half when your file your tax return next year. (Note that the monthly child tax credit payment amounts don't include the $500 credit available for older children, elderly parents, and other dependents.)

For 2021 only, the child tax credit amount is increased from $2,000 for each child age 16 or younger to $3,600 per child for kids who are 5 years old or younger and $3,000 per child for kids 6 to 17 years of age. If you received your first payment in July, that means the maximum monthly payment for each child under age 6 is $300 and for each child age 6 to 17 is $250. Note that families with higher incomes won't receive that much or could be denied the credit altogether, but most eligible parents will see a considerable bump in their child tax credit for the 2021 tax year. (Use our 2021 Child Tax Credit Calculator to see how much you should receive each month if you're first payment arrived in July.)

Families who get their first monthly payment after July will still receive 50% of their total credit for the year. As a result, the total payment will be spread over less than six months, making each monthly payment larger. For example, the maximum monthly payment for a family that received its first payment in September is $450-per-child for kids under age 6 and $375-per-child for kids ages 6 through 17.

Are Child Tax Credit Payments Taxable?

If you're receiving monthly child tax credit payments, the IRS isn't going to tax that money when you file your tax return next year. The payments are simply an advance of the child tax credit that you would otherwise claim on your 2021 return – they aren't "taxable income."

They still can affect next year's tax bill or tax refund, though. Since they represent advance payments of the child tax credit, they'll be subtracted from the credit amount you would otherwise be allowed to claim on your 2021 return. That will make your 2021 child tax credit smaller, which means either your tax bill will be higher or your tax refund will be smaller.

Opting Out of Monthly Child Tax Credit Payments

If you don't want to receive monthly child tax credit payments, you can opt-out through the IRS's Child Tax Credit Update Portal (although there are deadlines for opting out each month).

Why might someone want to opt-out of monthly payments? For example, to boost your tax refund, you may want to claim a larger child tax credit when you file your 2021 tax return next year. It also might be smart to opt-out if you no longer qualify for the child tax credit. This could happen if your 2021 income is too high, someone else (e.g., an ex-spouse) will claim your child as a dependent in 2021, or you live outside the U.S. for more than half of 2021. Otherwise, you might have to pay back some or all the money you received as monthly payments this year.

See How and When to Opt-Out of Monthly Child Tax Credit Payments for more information.

Payment by Direct Deposit, Check or Debit Card?

Most families will get their monthly child tax credit payments deposited directly into their bank account. That's how you'll get paid if the IRS has bank account information from:

  • Your 2019 or 2020 tax return;
  • The IRS's online tool used in 2020 by people who aren't required to file a tax return to get a first-round stimulus check; or
  • A federal agency that provides you benefits, such as the Social Security Administration, Department of Veterans Affairs, or the Railroad Retirement Board.

If the IRS doesn't have your bank account information, it will send you a paper check or debit card by mail.

You can use the IRS's Child Tax Credit Update Portal to change the bank account information the IRS has on file. You have until October 4 to do so for the October 15 payment. The online tool will tell you if you're scheduled to receive monthly payments by direct deposit. If so, it will list the bank routing number and the last four digits of your account number. If you don't change it, this is the account that will receive all future monthly payments.

If you do want to change the bank account, just update the bank routing number and your account number in the portal and indicating whether it's a savings or checking account. Note that monthly payments can't be split between multiple accounts – the entire payment must go into one bank account.

Families who are currently scheduled to receive payments by mail can also sign up for direct deposit using the Child Tax Credit Update Portal to add their bank account information (again, you must do so by October 4 to get your October 15 payment directly deposited into your account). Just enter your bank routing number and account number and indicate whether it's for a savings or checking account. You'll get paid much faster if you switch to direct deposit, plus you won't have to worry about a paper check or debit card getting lost or stolen.

More Information on the 2021 Child Tax Credit

In addition to increasing the credit amount and authoring monthly advance payments, Congress made other changes to the 2021 child tax credit, too. For example, the age for an eligible child was raised to 17, the credit is fully refundable, and the $2,500 earnings floor was removed. An additional layer of phase-outs was also introduced to prevent wealthier families from claiming a larger credit.

Right now, these enhancements only apply to the 2021 tax year. But, as mentioned earlier, President Biden and others want to extend most of them through 2025. (The credit would be fully refundable on a permanent basis under the president's plan.) Whether that happens remains to be seen, but it's certainly possible while Democrats control both houses of Congress and the White House.

We'll continue to cover any further child tax credit developments, but in the meantime you can get up-to-speed on all the changes for this year's credit at Child Tax Credit 2021: How Much Will I Get? When Will Monthly Payments Arrive? And Other FAQs.

Most Popular

Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
How to Calculate the Break-Even Age for Taking Social Security
social security

How to Calculate the Break-Even Age for Taking Social Security

When it comes to maximizing your Social Security benefits, there are many elements to consider. One factor that can be especially enlightening is your…
August 30, 2021
Spend Without Worry in Retirement
Financial Planning

Spend Without Worry in Retirement

Fears of running out of money prevent many retirees from tapping the nest egg they’ve worked a lifetime to save. With these strategies, you can genera…
August 30, 2021

Recommended

What Are the Income Tax Brackets for 2021 vs. 2020?
tax brackets

What Are the Income Tax Brackets for 2021 vs. 2020?

There are seven different federal income tax brackets for your 2021 tax return – each with its own marginal tax rate. Which bracket you end up in for …
September 14, 2021
When Are 2021 Estimated Tax Payments Due?
tax deadline

When Are 2021 Estimated Tax Payments Due?

If you're self-employed or don't have taxes withheld from other sources of taxable income, it's up to you to periodically pay the IRS by making estima…
September 14, 2021
The RMD Solution to the Hassle of Filing Estimated Taxes in Retirement
required minimum distributions (RMDs)

The RMD Solution to the Hassle of Filing Estimated Taxes in Retirement

If you don't need the money to live on, wait until December to take your RMD and ask the sponsor to withhold a big chunk for the IRS.
September 14, 2021
Tax Relief Available for Hurricane Ida Victims
Tax Breaks

Tax Relief Available for Hurricane Ida Victims

People and businesses in Louisiana, Mississippi, New Jersey, New York and Pennsylvania impacted by Hurricane Ida get more time to file and pay certain…
September 13, 2021