Children who are 17 or younger are generally eligible for the child tax credit (CTC) payments, but there are conditions. Parents must have their main home in one of the 50 U.S. states or Washington, D.C., for more than six months of the year, according to the IRS.
When Qualifying for the Fully Enhanced CTC
-$3,600 for children under 6 years old
-$3,000 for kids ages 6 to 17 years old
Single taxpayers must earn less than $75,000
Joint filers must earn less than $150,000.
Payments are reduced by $50 for every $1,000 of income above those limits.
Families that earn above those amounts their payments will be reduced by $50 for every $1,000 of income above those limits.
This threshold is $95,000 for single filers and $170,000 for joint filing.
Lastly, if these thresholds are exceeded these households get $2,000 per child or $167 per child who is 17 or younger through December, representing half of the $2,000 regular CTC
To recap; you will one of these three CTCs per child:
-$3,600 for children under 6 years old
-$3,000 for kids ages 6 to 17 years old
-$2,000 regular CTC when eclipsing the income threshold
Track Your Taxes
Keep in mind that the monthly payments are advances on 50% of the CTC and these will be claimed on the 2021 tax year when filing in 2022.
Here is the caveat: These advance payments are based on the latest tax return processed so for most people it should be 2020. What you need to take into consideration is if your family grew or if your income decreased or increased.
For if your income decreased or you have another child you’ll qualify for more money; however, remember 50% of the payment is being advanced to you. So if you’re used to your typical tax return account for this advancement of money.
If your income increased in 2021, then a chance exists that you may receive to much money. Hence, you need to do some math or check with your financial planner / CPA to see if you will owe a portion of that back to the IRS.
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