The Advanced Child Tax Credit is a monthly payment from the IRS to families with children

The Advanced Child Tax Credit (sometimes called the Advanced CTC) is a federal tax benefit that the IRS sends to you in monthly payments rather than waiting until tax time. If you have children under age 17, you may receive payments of $100 to $300 per child each month, depending on your household income. The IRS sends these payments automatically to families who filed a tax return in the previous year and meet income limits.

This is different from the regular Child Tax Credit, which you claim when you file your taxes. The Advanced version lets you get part of that money throughout the year instead of as a lump sum refund in April. The payments started in July 2021 and have continued since, though Congress must renew the program each year for it to keep running.

Key Takeaways

  • The Advanced Child Tax Credit sends you monthly payments of $100 to $300 per child under 17, based on your income and filing status.
  • You do not have to do anything to receive the payments if you filed a 2020 or 2021 tax return—the IRS sends them automatically.
  • Your income must fall below certain thresholds: $400,000 for married couples filing jointly, $200,000 for single filers, and $300,000 for heads of household.
  • The payments you receive reduce the Child Tax Credit you can claim when you file your next tax return, so you may owe money back if your income changes.

Who receives the monthly payments

The IRS automatically sends Advanced Child Tax Credit payments to people who filed a federal tax return in 2020 or 2021 and have children under age 17. You do not need to sign up or fill out a form—if you meet the basic requirements, the payments go to the bank account or address on file with the IRS.

You must be a U.S. citizen, national, or resident alien with a valid Social Security number. If you are married, you and your spouse must file jointly to receive the full payment. If you did not file a tax return in either of those years, you can still receive the credit by filing a return for the most recent tax year, even if you had no income.

Income limits and payment amounts

The amount you receive each month depends on your household income and filing status. The IRS reduces the payment by $50 for every $1,000 (or fraction of $1,000) your income exceeds the threshold for your situation. For married couples filing jointly, the threshold is $400,000. For single filers and heads of household, it is $200,000 and $300,000 respectively.

If your income is below the threshold, the full monthly payment is $300 per child under 6 years old and $250 per child ages 6 to 17. If your income is above the threshold, your payment shrinks. For example, a single parent earning $210,000 would see their payment reduced by $50 per child because they exceeded the $200,000 limit by $10,000.

How the IRS knows your income and adjusts payments

The IRS uses your most recent tax return to calculate your income and set your payment amount. If your income changes during the year—because you lost a job, got a raise, or had a major life change—the IRS does not automatically adjust your payments. You keep receiving the same amount each month based on last year's return.

The IRS does offer a tool called the Child Tax Credit Update Portal, where you can report a change in income, address, or number of children. If you report a decrease in income, the IRS may increase your monthly payment. If you report an increase in income, your payment may decrease. Changes you report usually take effect in the following month.

What happens when you file your tax return

The monthly payments you received are subtracted from the total Child Tax Credit you can claim on your tax return. If the payments add up to more than your actual credit, you may owe money back to the IRS when you file. This can happen if your income was lower when you received the payments but higher when you file your return, or if your family situation changed.

For example, if you received $3,000 in monthly payments but your actual Child Tax Credit for the year is only $2,500, you would owe the IRS $500 when you file. This is why it is important to report income changes through the Update Portal if you can—it helps keep your payments aligned with what you will actually owe.

What changed in recent years

The Advanced Child Tax Credit was expanded in 2021 as part of the American Rescue Plan. The payment amounts increased, and more families became may be able to access because the income thresholds were raised. The program was set to expire at the end of 2021, but Congress extended it through 2022 with the same payment amounts.

Starting in 2023, the program returned to smaller payment amounts and lower income thresholds than it had in 2021 and 2022. The monthly payment is now $100 to $250 per child depending on age, and the income thresholds are lower. You should check the IRS website or speak with a tax professional to understand how the current rules explore to your situation, since the program's terms change year to year.

Frequently Asked Questions

Do I have to pay back the monthly payments if my income goes up?

Only if the total payments you received exceed the Child Tax Credit you are may have access to to based on your final income for the year. If your income increased significantly, you may owe money back. Report income changes through the IRS Child Tax Credit Update Portal to avoid a large bill at tax time.

What if I did not file a tax return last year?

You can file a return for the most recent tax year to start receiving payments, even if you had no income. You will need to include information about your children and their Social Security numbers. A tax professional or free tax preparation service can help you file.

Can I get the payments if I am not a U.S. citizen?

You must be a U.S. citizen, national, or resident alien with a valid Social Security number. If you have a valid Individual Taxpayer Identification Number (ITIN) instead, you do not may have access to for the Advanced Child Tax Credit, though you may be able to claim a different credit when you file your return.

What if my address or bank account changed?

Update your information with the IRS as soon as possible through the Child Tax Credit Update Portal or by calling the IRS directly. If the IRS sends a payment to an old address or closed bank account, contact the IRS to request a replacement payment.