Parents, you’re probably getting a monthly cash infusion for each minor child during the second half of 2021. Monthly payments for the temporary extra child tax credits will start hitting bank accounts July 15.
The credits, which are part of the American Relief Plan, provide an extra $1,000 for children ages 6 to 17 and an extra $1,600 for children under 6, on top of the regular $2,000 child tax credit. The total value of the tax credit is $3,000 for kids ages 6 to 17, and $3,600 for kids younger than 6.
Half of that money will be paid out as an advance via monthly installment payments. You’ll get $250 a month for each dependent child ages 6 to 17 and $300 a month for each child younger than 6. You’ll then receive the other half of the credit when you file a tax return for 2021 next year.
But the rules can get confusing if your kid is celebrating a sixth or 18th birthday soon. Here are the cut-off dates based on your child’s date of birth. For other eligibility rules, including income limits, check out our child tax credit FAQ.
You Get $250/Month if Your Kid Was Born After This Date
To qualify for the $250 monthly child credits, your child must be 17 or younger on Dec. 31, 2021. That means if your child was born on Jan. 1, 2004 or later, you should receive the extra $250 a month if you meet the other requirements. Then you’ll get a $1,500 tax credit when you file your 2021 tax return.
But if you’re the parent of a 2003 baby? Sorry, but you won’t get a child tax credit for your kid, even if they’re still a dependent.
You Get $300/Month if Your Kid Was Born After This Date
To qualify for the $300 monthly child credits ($3,600 total), your child must be 5 or younger on Dec. 31, 2021. That means if your child was born on Jan. 1, 2016 or later, you should receive the extra $300 a month if you meet the other requirements. Then you’ll receive an $1,800 tax credit when you file your 2021 tax return.
If your kid was born between 2004 and 2015, you get the extra $250 a month, followed by the $1,500 credit when you file your 2021 taxes.
What About the Babies Born in 2021?
If your child was born in 2021, you’ll still qualify for the full $3,600 tax credit. But because you didn’t list your child on your 2020 tax return, you won’t automatically get your monthly payments. The IRS says on its website that taxpayers will “have the opportunity to update information about changes in their income, filing status or the number of qualifying children.”
It’s likely that you’ll be able to provide the child’s information and start receiving monthly payments, though the IRS hasn’t released further details. Otherwise, you’ll have to wait and receive the entire $3,600 credit when you file your taxes.
If you have a new addition to the family on the way, they’ll still qualify for the $3,600 credit — as long as they make their debut by Dec. 31, 2021.
A bonus for all those 2021 babies: Not only will they be eligible for the $3,600 child credits, but you’ll also receive a $1,400 stimulus check on their behalf when you file your 2021 return.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to [email protected].