The new advanced child tax credit starts in July! Are you eligible?

The new advanced child tax credit starts in July! Here’s how to know if you’re eligible.

Starting in July, the IRS will send monthly payments to people with qualifying children. The payments this year will add up to $1,500 per child aged 6-17, and they’ll add up to $1,800 for children under 6. The advanced credit will be delivered as monthly payments of $250 per child aged 6-17 and $300 per child under 6. 

The IRS will distribute the money based on information from 2020 tax returns, or, if no 2020 return claiming the child is on file, then based on 2019 returns, including non-filer returns from last year.  If you haven’t yet filed a tax return claiming your qualifying children, it’s not too late!  The Campaign for Working Families is still preparing tax returns for free:  https://cwfphilly.org/  

There will also be a website soon for people who need to update the information on their 2020 or 2019 returns about themselves and their children—for example, people with children born in 2021, or who will be able to claim children for this year that they couldn’t claim on their 2020 return.

But who counts as a “qualifying child” for this credit?

Here are some tips to help determine whether you can claim a child.  Each of the following must be true to claim the child for the child tax credit.

• The child doesn’t need to be your son or daughter, but they must be related to you (biologically, through adoption, or through marriage). Nieces and nephews, grandchildren, stepchildren, and even siblings can all be eligible if they meet the other requirements.  Cousins and other more distant relatives, however, don’t count.
• The child doesn’t need to live with you all year, but they do need to live with you for at least 6 months. When two parents share custody of a child, the parent who had the child for more nights has the right to claim them. If both parents lived with the child all year, but they do not file jointly, the parent with the higher income has the right to claim the child.
• The child must be under age 17 at the end of 2021 (so, they must be born after December 31, 2004).
• Both you and the child must be US citizens or have lived in the U.S. for at least 6 months and have Social Security Numbers valid for employment.
• The child must not have provided more than half of their own financial support. Financial support means money towards housing, food, medical care, and other essentials. An example of a child providing their own financial support would be a teenager with a job who contributes enough income to the household expenses to cover at least half of their own costs. Remember, you don’t necessarily need to have provided the child’s support— in fact, even people who have no income may be able to claim children for the new child tax credit.  The important thing is that the child must not support themselves. Note: If a child gets SSI, that is not considered the child’s own financial support.  But if the child gets Social Security benefits from a deceased parent, that does count as providing some of their own support. 

For many families, the answer to who can claim a child may not be straightforward. The IRS website provides an anonymous tool you can use to help figure out if you can claim a child: https://www.irs.gov/help/ita/whom-may-i-claim-as-a-dependent You can also contact PLA’s Taxpayer Support Clinic with questions about this often tricky topic.