Here's What You Need to Remember: The IRS has based eligibility for the Child Tax Credit off of families’ 2019 and 2020 tax returns. However, if you did not file taxes for those years, you can instead sign up via the IRS’ non-filers tool, available on its website.
Next month, on July 15, 36 million households will receive their first of six monthly payments for the Child Tax Credit. For the most part, eligible families will have already received a letter from the IRS, detailing how much their expected payment will be and how to contact the agency in the event of any problems.
What is the Child Tax Credit?
Throughout the world, many countries provide their citizens with a tax credit to offset the high costs of raising a young child. America’s Child Tax Credit has been a part of tax policy since before the Trump administration. However, under Trump, the credit was doubled from $1,000 per child per year to $2,000.
As part of the Biden administration’s American Rescue Plan Act, passed in March 2021, the credit was temporarily increased to $3,000 for children older than six and $3,600 for children younger than six. In response to the Covid-19 pandemic, the bill also contained a provision sending half of the credit out in advance—hence the checks beginning in July.
This increase is scheduled to expire in April 2022, but Biden has proposed to extend it until 2025 as part of his $1.9 trillion American Families Plan.
Who is Eligible for the Child Tax Credit?
Children must be younger than eighteen; they must not turn eighteen before January 1, 2022. They must be related in some way to a U.S. taxpayer, properly registered as a dependent, and live with the taxpayer for more than half of the year. (For example, if two parents have a divorce, they cannot both separately claim the credit; it goes to whoever has the greater share of custody.)
What are the Income Limits?
As with the stimulus payments, there is an upper limit to who qualifies for the payment. According to the IRS, if your joint income as a couple exceeds $150,000 (or as a single parent exceeds $75,000), the tax credit will be phased out by $50 for each $1,000 your income exceeds the upper limit, until at $170,000 (or $95,000) you will receive nothing.
This number is actually far lower and more exclusionary than in the past. Prior to the American Rescue Plan Act, the upper limit was $400,000 for families and $200,000 for individuals. This high ceiling allowed Jeff Bezos, then worth $18 billion, to claim the Child Tax Credit for his four daughters in 2011.
I Didn’t File a Tax Return. How Do I Apply?
The IRS has based eligibility for the Child Tax Credit off of families’ 2019 and 2020 tax returns. However, if you did not file taxes for those years, you can instead sign up via the IRS’ non-filers tool, available on its website.
After providing basic information—including name, address, date of birth, Social Security number, and email address—the IRS will determine if you are eligible for the payments or not. If you are, no further action needs to be taken; expect a check in the middle of July.
Can the IRS Help Me File?
Maybe. The IRS has announced that it will conduct a series of trainings in twelve major U.S. cities, taking place from July 9-10. More information can be found here, although if you do not live in any of these cities, you are likely on your own.
Trevor Filseth is a current and foreign affairs writer for The National Interest. This article first appeared earlier this year.