As the phrase goes, all good things come to an end, and the Internal Revenue Service is saying just that about the advance payments of the Child Tax Credit, or CTC.
In December, families who have qualified for the advance payments of the credit will get their final installment of the advance payments.
The party, however, is only half over.
Qualified taxpayers get to claim the other half of the total tax credit on their 2021 income tax return that’s filed in the new year. Since it’s a refundable credit, they’ll get the refund even if they don’t owe any tax due.
The advance payments of the CTC are ending
The last batch of advance payments—most of them arriving via direct deposit—are going out to more than 36 million American families and total some $16 billion.
The advance payments of the credit were made possible by the American Rescue Plan legislation, which allowed more than 200 million payments worth a total of $93 billion. For those families that qualified, each advance payment could be up to $300 per month for each child under age 6, and up to $250 per month for each child age 6 through 17.
Some details on the December payments include:
- Families will see the direct deposit payments in their accounts starting December 15. Like the prior payments, the vast majority of families will receive them by direct deposit.
- For those receiving payments by paper check, be sure to allow extra time, through the end of December, for delivery by mail.
- Payments are going to eligible families who filed a 2019 or 2020 federal income tax return. Returns processed by December 1 are reflected in these payments. This includes people who don't typically file a return but either during 2020 successfully filed a return to register for Economic Impact Payments using the IRS Non-Filers tool on IRS.gov, or in 2021 successfully filed a return by using the Non-filer Sign-up Tool for advance CTC.
- Families who did not get a July, August, September, October or November payment and are getting their first monthly payment this month will still receive their total advance payment amount for the year (which is half of their total Child Tax Credit). This means that the total advance payment amount will be made in one December payment.
File to get the rest of the credit
Qualified taxpayers who didn’t get any advance payments of the Child Tax Credit can still claim the full amount of the credit by filing a 2021 federal income tax return, which is due in April.
Those taxpayers who received advance CTC payments have to file a 2021 income tax return to claim the remaining half of the credit. In so doing, they’ll compare the advance Child Tax Credit payments they got in 2021 with the total amount of the CTC the are qualified to claim.
The IRS says it will send out Letter 6419 in January, telling taxpayers the total amount of advance Child Tax Credit payments they received and the number of qualified children that were claimed to get the credit.
Taxpayers should keep this letter and file it with their other tax records.
For more information, visit Reconciling Your Advance Child Tax Credit Payments on Your 2021 Tax Return on the IRS website. Other resources can be found on the IRS special advance CTC 2021 page, also on IRS.gov.