The Advanced Child Tax Credit Explained

The Advanced Child Tax Credit (often called ACTC) is money the federal government sends you during the year if you have children under 17. Instead of waiting until you file your taxes to claim the child tax credit, the IRS sends you part of it monthly — usually in your bank account or by check. For 2024, the monthly payment is up to $200 per child under 6 and up to $150 per child ages 6 to 16, depending on your household income.

The credit itself is not new — parents have claimed it on tax returns for years. What changed is that the IRS now offers to send part of the money ahead of time, starting in July of each year. You do not have to take the advance payments; you can wait and claim the full credit when you file your return instead. But most families use the monthly payments because the money arrives when they need it.

Key Takeaways

  • The Advanced Child Tax Credit sends you monthly payments from July through December if you have children under 17 and meet income limits.
  • The amount depends on your child's age and your household income; families earning under $400,000 per year typically receive the full monthly amount.
  • You must enroll through the IRS portal at IRS.gov to receive the advance payments; the IRS does not send them automatically.
  • Any money you receive in advance reduces the credit you claim on your tax return, so you may owe money back if your income changes or if you received more than you were may have access to to.
  • If you do not enroll, you can still claim the full child tax credit when you file your return the following year.

Income Limits and Payment Amounts

The amount you receive each month depends on two things: how many children you have and what your household income is. For 2024, families earning $400,000 or less per year (or $600,000 if married filing jointly) receive the full monthly payment. If you earn more than that, the payment phases out — it gets smaller as your income rises.

The monthly amounts are $200 per child under age 6 and $150 per child ages 6 to 16. So a family with two children under 6 would receive $400 per month if they meet the income threshold. These amounts are half of the full annual credit; the other half is claimed on your tax return when you file.

Your income is measured using your most recent tax return. If your 2023 return showed you earned $50,000, the IRS uses that figure to calculate your 2024 payments. If your income changes during the year — you lose a job, get a raise, or have a major life change — the payment amount does not adjust until the following year.

How to Enroll and Receive Payments

The IRS does not send advance payments automatically. You must enroll yourself through the IRS Child Tax Credit Update Portal, which opens each July at IRS.gov. You will need your Social Security number, date of birth, and mailing address. The portal lets you confirm or update your information, choose whether to receive payments by direct deposit or check, and decide how much of the credit you want to receive in advance.

Payments are sent monthly from July through December — six payments total. If you enroll after July, you receive payments for the remaining months of that year. Direct deposit is faster and more reliable than checks; if you choose direct deposit, payments usually arrive within a few business days of the scheduled date.

You can also use the portal to unenroll if your situation changes or if you decide you would rather claim the full credit on your tax return instead. Some families unenroll if their income rises during the year, because receiving advance payments they are not may have access to to means they will owe money back when they file.

What Happens When You File Your Tax Return

When you file your tax return the following year, you report how much you received in advance payments. The IRS subtracts that amount from your full child tax credit. If you received $1,200 in advance payments and your full credit is $2,000, you claim the remaining $800 on your return.

If you received more in advance than you were may have access to to — because your income rose during the year, or because you reported a child who was not actually your dependent — you will owe the difference back. This can happen if you received payments based on your 2023 income but earned significantly more in 2024. The IRS will reduce your refund or send you a bill for the amount owed.

If you received less than you were may have access to to, you claim the remaining balance on your return and receive it as part of your refund. For example, if you were may have access to to $2,000 total but only received $1,000 in advance, you claim the other $1,000 when you file.

Who Can Receive the Advanced Credit

You must be a U.S. citizen or resident alien, have a valid Social Security number, and have a child under 17 who also has a valid Social Security number. The child must be your biological child, stepchild, foster child, or a relative you claim as a dependent. You must live with the child for more than half the year.

Your filing status matters. Single parents, married couples filing jointly, and heads of household can all receive the credit. Married people filing separately cannot. If you are claimed as a dependent on someone else's return, you cannot claim the credit yourself.

Income limits explore. For 2024, the full payment goes to single parents earning up to $200,000 per year and married couples earning up to $400,000. If you earn more, the payment shrinks. Above $600,000 for married couples or $300,000 for single parents, the credit phases out completely.

Advance Payments Versus Waiting Until Tax Time

Some families choose not to enroll in advance payments and instead claim the full credit on their tax return. This makes sense if your income is unstable or if you expect a major change — a job loss, a second job, or a significant raise. Waiting until you file means you know exactly what you earned and can claim the correct amount without owing money back.

Advance payments are useful if you need the money during the year and your income is steady. The monthly deposits help with groceries, childcare, and other expenses. But they require you to track the amounts you receive and report them accurately when you file.

You can also split the difference: enroll for some months and unenroll for others. If you know your income will change in September, you could receive payments through August and then unenroll for the rest of the year.

What Changes Year to Year

The monthly payment amounts change based on inflation and tax law. In 2023, the amounts were different than they are in 2024. Congress can also change the credit itself — it has expanded and contracted several times in recent years. Income limits and phase-out thresholds also shift annually.

The IRS announces the new amounts each year, usually in late fall for the following year. If you enrolled in 2024, you will need to check whether the amounts or income limits changed for 2025 before you enroll again. The IRS website and your tax software will have the current year's figures.

Frequently Asked Questions

What if my income drops during the year?

The IRS uses your previous year's tax return to calculate payments, so a drop in current income does not change your monthly amount. When you file your return, you report your actual income for the year. If it was lower than expected, you may be may have access to to a larger credit and will receive the difference as part of your refund.

Can I get the advance payments if I did not file a tax return last year?

You can still enroll, but the IRS will use information you provide in the portal instead of a previous return. You will need to report your current income, number of children, and other details. If you have never filed a return, you may want to file one before enrolling so the IRS has official income information.

What if I have shared custody of a child?

Only one parent can claim the child tax credit. Usually this is the parent who has the child for more than half the year. If you and the other parent alternate years, you take turns claiming the credit. You must decide between yourselves who will claim the child each year, and only that person can enroll for advance payments.

Do I have to repay the advance payments if I owe taxes?

The advance payments are separate from any taxes you owe. If you owe federal income tax, the IRS can use your refund to pay what you owe. But the advance child tax credit payments themselves do not disappear — they reduce the credit you claim on your return, and any overpayment is handled as part of your overall tax situation.

What happens if I move during the year?

Update your address in the IRS Child Tax Credit Update Portal so payments reach you. If you are receiving checks and you move without updating your address, the check may be returned to the IRS. Direct deposit is more reliable because it goes to your bank account regardless of where you live.