What you need to do now to receive the Child Tax Credit payments starting July 15

Stop! Don’t know where to start when it comes to claiming the Child Tax Credit? Take our short quiz to find out.

Thanks to the improved Child Tax Credit this year, you could receive up to an extra $300 for each child in your family, each month from July through December. Here’s what you need to know.

The breakdown

If you filed tax returns for 2019 or 2020 or signed up to receive a stimulus check from the IRS, you will get the Child Tax Credit payments automatically for the next six months. You do not need to sign up or take any action. If you usually receive your tax returns through direct deposit, that’s how you will receive the advance monthly Child Tax Credit payments. And if you typically receive your tax return via check, then that’s how you’ll receive these payments.

• Tip #1: Signing up for direct deposit with the IRS could help you get your credit even faster than waiting for a check to arrive in the mail.
• Tip #2: If you would like to receive one lump sum Child Tax Credit next tax season instead, use this tool to unenroll and opt-out of monthly payments.

If you don’t typically file taxes, you may still be eligible to receive the Child Tax Credit

Many families with children are eligible for this crucial tax relief – including those who have not made enough money to be required to file taxes. The IRS has a tool for non-filers to receive the Child Tax Credit.

• Tip #3: Use this tool from the IRS to claim the Child Tax Credit.

Monthly payments versus one lump sum check

Starting July 15, families will start receiving monthly payments as high as $300 per child as part of the new expanded child tax credit. The most important thing to note about the 2021 Child Tax Credit is that it’s an ADVANCE tax credit. So instead of receiving one lump sum on your tax return, you will receive smaller monthly payments. And because the monthly payments are an advance credit, you will receive a smaller tax return in the new year.

Parents alternating who claims a child each year may be the most common situation where a taxpayer may receive the advance child tax credit payments even when they won’t be claiming the child. If you claimed a child for the tax year 2020 but the other parent will claim them for the tax year 2021, you may want to opt-out of the advance child tax credit payments.

Protect yourself from fraud

Unfortunately, scammers may try to take advantage of people receiving the credit. Here’s how to stay one step ahead:

• Be extremely careful about what you share on social media related to your taxes.
• Go to official sources like the IRS website to get information. The IRS’s Taxpayer Advocate Service is a great resource to find trustworthy tips.
• Read more tips on how to recognize a tax scam and what to keep an eye out for.

Need more info?

Here’s the official White House website on the advance Child Tax Credit. You can also share your thoughts on the Child Tax Credit with other SaverLife members in our community forum.