Advance Child Tax Credit FAQ
Published July 12, 2021
By now you may have heard of the upcoming Child Tax Credits, but you might not be sure what they are exactly. The Child Tax Credits are early payments from the IRS, where individuals filing or filing jointly can get 50% of the estimated amount of the Child Tax Credits that they would otherwise claim on the 2021 tax return during the 2022 tax filing season. Below are a few more frequently asked questions about the Child Tax Credit.
How do I qualify for advance Child Tax Credit payments?
You qualify for advance Child Tax Credit payments if you have a qualifying child. Also, you — or your spouse, if married and filing a joint return — must have your primary home in one of the 50 states or the District of Columbia for more than half the year.
Your primary home can be any location where you regularly live, such as a house, apartment, mobile home, shelter, temporary lodging, or other location. Your primary home does not need to be the same physical location throughout the taxable year. A permanent address is not necessary to get these payments. If you are temporarily away from your main home because of illness, education, business, vacation, or military service, you are generally treated as living in your main home.
How do I know if my child qualifies for the advance Child Tax Credit?
According to IRS.gov, 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 2021 tax year. 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. For more information about how to properly claim an individual as a dependent, see IRS Publication 501, Dependents, Standard Deduction, and Filing Information.
- The individual does not file a joint return with their 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. For more information on this condition, see IRS Publication 519, U.S. Tax Guide for Aliens.
Do I need to do anything to received advance Child Tax Credits?
If you were qualified to receive the advance Child Tax Credit payments based off your 2020 tax return or your 2019 tax return, including information you entered in the Non-Filer tool for your Economic Impact Payments on IRS.gov in 2020, you most likely will not need to do anything.
If you were not eligible or didn’t file your 2020 tax return or your 2019 tax return, the IRS created an online Non-Filer tool that will allow individuals who fall under this category to file a simplified tax return. By filling this out, it allows eligible individuals to register for advance Child Tax Credit payments, as well as claim the 2020 Recovery Rebate Credit. Taxpayers also can visit IRS.gov/filing for details about:
- IRS Free File
- Free File Fillable Forms
- Child Tax Credit Non-filer Sign-up Tool, or
- Finding a trusted tax professional.
How do I get my advance Child Tax Credit?
Similar to the Economic Impact Payment, the fastest way to get advance payments is by filing your tax return electronically and provide up to date information about your financial account so that you can receive your payments by direct deposit. You can use a bank account, prepaid debit card, or mobile app for your direct deposit and will need to provide routing and account numbers. If you would like to have your payment direct deposited, Neighborhood CU offers several free checking accounts that can be opened within minutes.
Can I get my advance Child Tax Credit earlier than the date given?
The IRS will begin disbursing advance Child Tax Credit payments on July 15, but the deposit can appear in members accounts as early as July 13. After that, payments will be disbursed monthly through December 2021.
What if I do not want to receive advance Child Tax Credit payments?
If you’d rather not receive monthly advance Child Tax Credit payments and would prefer to claim it in full when filing for your 2021 tax return, or if you know you will not be eligible when filing for your 2021 tax return, you can unenroll through the Child Tax Credit Update Portal (CTC UP). Using this tool will unenroll you before the first advance Child Tax Credit payment is made.
Are advance Child Tax Credit payments taxable?
No, they are just advance payments of your tax year 2021 Child Tax Credit. Advance Child Tax Credit payments are not income and will not be reported as income on your 2021 tax return.
How do I avoid scams relating to advance Child Tax Credit payments?
Like the Economic Impact Payments, scammers will view the advance Child Tax Credits as profit a opportunity. We urge our members to be vigilant when it comes to these payments. Neighborhood Credit Union nor the IRS will ever reach out to you directly via email, text, or social media and ask for personal information. Beware of any emails that include attachments or links with additional information about advance Child Tax Credit payments or Child Tax Credit refunds.
If you receive a suspicious IRS-related email, visit the page Report Phishing and Online Scams for additional information. Or if you receive anything that claims to be from us but appears suspicious, tell us directly.
What happens if my advance Child Tax Credits go to a closed account?
If your advance Child Tax Credits goes to a closed account, it will be rejected by the financial institution and then sent to you via paper check, similar to the economic impact payments.
If you have any additional questions or need assistance, please visit the IRS website. If you need assistance with your account, please reach out to Neighborhood Credit Union.
If you have any additional questions or need assistance, please visit the IRS website. If you need assistance with your account, please reach out to Neighborhood Credit Union.
Skyler has been a Marketing Content Specialist at Neighborhood Credit Union since 2019.
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As an active part of the community for 93 years, Neighborhood Credit Union is a not-for-profit financial organization serving the state of Texas with branch locations in Collin, Dallas, Denton, Ellis, and Tarrant counties. With assets topping $1 billion, Neighborhood Credit Union has a continuously growing membership of over 60,000. For more information, call (214) 748-9393 or visit our homepage.