If you have children under the age of seventeen, you likely received monthly payments from the IRS from July through December 2021. You will also be receiving letter 6419 (2021 advanced Child Tax Credit (CTC)) from the IRS in late December 2021 or January 2022. You will need this letter to file your 2021 tax return.
Prior to 2021, your CTC was claimed when you filed your tax return. In 2021 these advanced payments were meant to pay out half of the CTC that you qualified for during 2021 only. If you were eligible for the child tax credit, but did not receive any advance payments, you can claim the full amount of the credit on your 2021 tax return. Other changes to the CTC for 2021 only:
- The credit was increased from $2,000 to $3,000 for each child under the age of six and to $2,500 for each child age six to seventeen (there is a phase out for income over $75,000 for an individual and $150,000 for joint filers).
- The CTC is refundable, meaning you will receive it even if you did not have income.
Unless Congress acts, the advanced payments will not continue in 2022, and the CTC will revert back to the 2020 amount of $2,000 per qualifying child.