The last child tax credit payment in 2021 will be sent on December 15
It is almost time for the sixth and final batch of monthly child tax credit payments. The first five installments were sent from July to November, while the the last payment is scheduled for December 15 – it’s this week!
For parents who received their first child tax credit payment in July, the maximum the monthly payment for each child aged 6 to 17 is $ 250 and $ 300 for each child under 6. This is the most you can get, but higher income families will not receive as much or may be denied the credit. (Use the Kiplinger 2021 Child Tax Credit Calculator for an estimate of your monthly payments if you received your first payment in July.)
If you receive your first monthly payment after July, the maximum payment amount is higher. This is because you will still receive the same amount of money in 2021 (i.e. 50% of your total child tax credit for the year), but it will be paid in fewer installments. For example, the maximum monthly payment for a family that receives its first payment in December is $ 1,500 per child for children aged 6 to 17 and $ 1,800 per child for children under 6. (Again, wealthier families will receive less or nothing at all.)
Child Tax Credit Payments by Direct Deposit
In most cases, monthly child tax credit payments are deposited directly into each family’s bank account. This is how you will be paid if the IRS has bank account information from:
- Your 2019 or 2020 tax return;
- The IRS online tool used in 2020 by people who are not required to file a tax return to get a first stimulus check; Where
- A federal agency that provides you with benefits, such as the Social Security Administration, the Department of Veterans Affairs, or the Railroad Retirement Board.
If the IRS does not have your bank account information, it will send you a paper check or debit card by mail.
Unfortunately, it is too late to change the banking information for the last child tax credit payment. This includes signing up for direct deposit if you plan to receive a paper check or debit card. These changes had to be submitted using the IRS Child Tax Credit Update Portal before November 29.
The deadline for opting out of the last child tax credit payment has also passed. Some people didn’t want monthly payments because they preferred a higher tax refund when they file their tax return next year. Other parents withdrew because they knew they would not qualify for the 2021 Child Tax Credit (for example, because their 2021 income is too high, someone else will report their child as a dependent in 2021, or they lived outside the United States for more than half of 2021) and were concerned about having to repay.
Will monthly child tax credit payments continue into 2022?
Monthly child tax credit payments currently expire at the end of the year. However, the payment on December 15 may not be the last. The Build Back Better law, which was passed in the House of Representatives and is awaiting a decision in the Senate, would extend monthly payments (and other child tax credit improvements enacted for 2021) by one year.
There would be differences between the 2021 child tax credit payments and the 2022 payments if the current version of the Build Back Better law is enacted. For example, people with higher incomes won’t receive monthly payments next year, and the IRS might use more information to determine your payment amount. However, for most families, the monthly payments would be more or less the same as in 2021. (For more on the potential changes, see Child Tax Credit 2022: How Next Year’s Credit could be Different.)
Democrats in Congress want the Build Back Better law to be enacted before the end of the year so that monthly child tax credit payments can start again in January without wasting a moment. Senate Majority Leader Chuck Schumer (DN.Y.) hopes the Senate can pass the Build Back Better Act before Christmas. However, it is widely believed that the Senate will make changes to the legislation, which would mean the bill would have to be sent back to the House for another vote before being sent to President Biden for signature. Given this and the concerns of Sen. Joe Manchin (DW.Va.) and other moderate Democrats about the price of legislation and its too rapid evolution, it is not yet clear whether the Build Back Better law will become law. this year (or never).
The Build Back Better law may also be enacted with amended child tax credit provisions. For example, Manchin suggested that a work requirement for monthly payment recipients be added to the invoice. This, or other changes, could be made to the current Build Back Better Act in order to gain Manchin’s support, which is needed to pass the comprehensive bill in the Senate.