IRS gears up to send next-to-last child tax credit payment

What could be the next-to-last round of child tax credits will start rolling out to families on Monday, Nov. 15.

The Internal Revenue Service and Treasury Department will begin distributing the fifth round of payments to families. Most parents will automatically receive up to $300 for each child up to age 6 and $250 for each one ages 6 through 17. Parents, ultimately, can claim up to $3,600 per child on their 2021 taxes next year.

Presently, one more payment is set to be sent next month unless Congress decides to make the child tax credit a permanent act. The enhanced credit that’s currently being distributed was part of the $1.9 trillion coronavirus relief package passed in March. Part of the budget reconciliation package calls for it to be made permanent, though that bill is still being negotiated.

Eligible taxpayers with their bank account information on file with the IRS will get their payment via direct deposit. The rest of the nearly 36 million parents will get it delivered in the mail—unless they have opted to receive it in their 2022 tax return. Single filers with a modified adjusted gross income of less than $75,000 per year and couples filing jointly with annual income of $150,000 or less can qualify for the full child tax credit for each dependent. People and households that earned more last year will see their payments phase out.

As part of this round, the IRS has added a feature to the child tax credit portal that lets parents update their adjusted gross income if it changed in 2021. That’s worth doing, as the current payments are based on 2020 income, but ultimate eligibility will be determined by your 2021 revenue. If you’re making substantially more, you could have to pay back some of the advance credits you’ve received.