The Advanced Child Tax Credit is money the IRS sends you during the year, not just at tax time

The Advanced Child Tax Credit (often called ACTC) is a federal tax credit that the IRS pays out in monthly installments rather than waiting until you file your taxes. Instead of claiming the full amount when you file in April, you receive half the money spread across monthly payments from July through December. The other half comes when you file your tax return the following spring.

This matters because it puts cash in your account when you need it — not months later. The monthly payments are automatic once you are set up; you do not have to do anything each month to receive them. The IRS uses information from your most recent tax return to calculate the amount, so the payment is based on your household income and the number of children under 17 you claimed.

The credit itself is not new — the Child Tax Credit has existed for years. What changed in 2021 was that Congress allowed families to receive half of it in advance, monthly, rather than waiting until tax season. That advance portion is what people call the ACTC.

Key Takeaways

  • The Advanced Child Tax Credit sends you half your child tax credit in monthly payments from July through December, with the other half coming when you file your return.
  • The IRS calculates your monthly payment based on your most recent tax return, your current household income, and the number of children under 17 in your home.
  • You can update your information with the IRS if your income or family situation changed since you last filed, which may change your monthly payment amount.
  • If you receive more money than you are may have access to to, you may owe some back when you file your tax return, so keeping records of what you received is important.

How the IRS calculates your monthly payment

The IRS looks at your most recent tax return to find your income and the number of may have access to children. For 2024, the full credit is up to $2,000 per child under 17. The IRS divides that amount in half — so up to $1,000 per child — and spreads it across six months (July through December). That means you could receive up to about $167 per child each month, though the exact amount depends on your income.

The credit phases out as your income rises. If you earn above a certain threshold, your monthly payment is smaller. The income thresholds vary by filing status — they are higher for married couples filing jointly than for single filers. You can find the exact threshold for your situation on the IRS website or by using the IRS's online tool.

If your income or family situation changed since you filed your last return, the payment the IRS sends may not match what you actually deserve. This is why the IRS lets you update your information before the payments start.

Updating your information if your situation changed

If you had a major life change — a job loss, a new job with different pay, a new child, a custody change, or a marriage or divorce — you can tell the IRS before your payments begin. The IRS has an online tool called the Child Tax Credit Update Portal where you can report changes to your income or household.

You can also choose to opt out of the monthly payments entirely if you prefer to claim the full credit when you file your return. Some people do this if they expect their income to be much lower at tax time, or if they want to handle the credit all at once. Once you opt out, you stay opted out unless you change your mind and re-enroll.

Updating your information takes about 10 minutes online. You will need your Social Security number, date of birth, and address on file with the IRS. After you submit changes, the IRS will send you a confirmation, and your next payment will reflect the new amount.

What happens when you file your tax return

When you file your 2024 tax return in early 2025, you will report the total Child Tax Credit you are may have access to to. The IRS will compare that to the monthly payments you already received. If the payments add up to exactly what you owe, nothing happens — the credit is complete. If you received more than you deserve, you may owe some money back. If you received less, you get the difference as a refund or credit against taxes owed.

This is why it matters to keep track of what you received. The IRS will send you a letter (Form 6419) in January showing the total amount paid to you in 2024. Keep that letter with your tax documents. When you file, your tax software or preparer will ask you to enter the amount from that letter, and the system will automatically calculate whether you owe anything back.

If you owe money back, you can pay it with your return or set up a payment plan with the IRS. The amount owed is usually not large if your income stayed roughly the same throughout the year, but it can be significant if your circumstances changed dramatically.

Who can receive the Advanced Child Tax Credit

You must have claimed a child under 17 on your most recent tax return, and that child must be a U.S. citizen, national, or resident alien. The child must have a valid Social Security number. You must also have a valid mailing address on file with the IRS, and you must have filed a tax return in the previous year (or be required to file one).

If you did not file a return in the previous year but think you should have, or if you are not sure whether you may have access to, you can still file a return now. The IRS allows you to file returns for prior years, and doing so can make you may be able to access for the credit going forward.

If you are a noncitizen without a Social Security number, your child cannot be claimed for this credit, even if your child has a number. The rules are strict on this point.

What to do if you did not receive your payments

If you were supposed to receive monthly payments but did not see them in your bank account, start by checking the IRS website or calling the IRS helpline to confirm whether payments were sent. Sometimes payments are delayed by a few days, or they may have been sent to an old address or bank account.

If the IRS shows that payments were sent but you never received them, you can request a trace to find out what happened. The IRS can investigate whether the payment was lost in the mail or deposited to the wrong account. This process takes time, so contact the IRS as soon as you realize a payment is missing.

If you moved during the year, make sure your address is current with the IRS. Payments sent to an old address will not reach you. You can update your address online or by mail.

The difference between ACTC and the regular Child Tax Credit

The Child Tax Credit itself has been around since 1997. It is a dollar-for-dollar reduction in the taxes you owe, up to $2,000 per may have access to child. Before 2021, you could only claim it when you filed your return — you had to wait until tax season to get the money.

The Advanced Child Tax Credit is the same credit, just paid differently. Instead of one lump sum in spring, you get half of it in six monthly payments starting in July. The total amount you receive is the same; the timing is different. The advance payments are optional — you can choose to receive them or wait and claim the full amount at tax time.

Some people confuse ACTC with other programs like the Earned Income Tax Credit (EITC) or stimulus payments. They are separate. The EITC is a different credit for lower-income workers. Stimulus payments were one-time payments sent during the pandemic. The ACTC is specifically the advance portion of the Child Tax Credit.

Frequently Asked Questions

Can I get the Advanced Child Tax Credit if I did not file a tax return last year?

You generally need to have filed a return in the previous year to receive ACTC payments. However, you can file a return now for that prior year, and doing so may make you may be able to access for future payments. Contact the IRS or a tax preparer to discuss your specific situation.

What if my income went down during the year?

If your income dropped significantly — due to job loss or reduced hours — you can update your information with the IRS before payments begin. A lower income may mean a higher credit. You can also wait and claim the correct amount when you file your return; the IRS will adjust it then.

Do I have to pay back the ACTC if I owe taxes?

The ACTC is separate from your tax liability. If you owe taxes for other reasons, you still keep the credit. However, if you received more ACTC than you were may have access to to, you may owe some of it back when you file your return — that is different from owing taxes.

What if my child's father or mother also claims the child on their return?

Only one person can claim a child for the credit. If both parents claim the same child, the IRS will disallow one of the claims and may ask for repayment. Make sure only the parent with custody or the agreed-upon claimant reports the child.

Can I receive ACTC if I am self-employed?

Yes. Self-employed people who file a tax return and claim may have access to children can receive ACTC payments. Your income is calculated the same way as for any other filer — based on your net profit from self-employment.