If a parent filed taxes in 2020, and then a child was born or adopted in 2021, are can they receive the monthly "Advance Child Tax Credit" payments?

Question

Suppose someone filed a tax return in 2020. Also suppose a child was either born or adopted into the family in 2021. Are they eligible to receive the monthly "Advance Child Tax Credit" payments from July to December 2021?

The IRS website is not very clear on this.

The website says...

To qualify for advance payments of the Child Tax Credit, you (and your spouse, if you filed a joint return) must have:

• Filed a 2019 or 2020 tax return and claimed the Child Tax Credit on the return or
• Given us your information in 2020 to receive the Economic Impact Payment with the Non-Filers: Enter Payment Info Here tool or
• Given us your information in 2021 with the Non-Filer: Submit Your Information tool; and ...

We fail on the first bullet point, because the child would not have been claimed on a return in 2019, or 2020 (since they were not yet born or adopted).

Regarding the second bullet point, the web page for the Non-Filers: Enter Payment Info Here Tool says that the tool is closed and can't be used anymore (probably because its not 2020). And in any case doesn't appear to be appropriate for someone who actually filed a return.

The next possible option is to submitting to the IRS "your information in 2021 with the Non-Filer: Submit Your Information tool". For this the IRS web page links to a whitehouse.gov web page. That page doesn't really give any info regarding if someone who filed a return in 2020 would be eligible to use the "Non-Filer: Submit Your Information tool". But the name of the tool strongly suggests that its only for people who didn't file a return in 2020.

The IRS web page for the "Advance Child Tax Credit Eligibility Assistant" asks, as the first question...

Did you claim the Child Tax Credit on your most recent tax return and will you claim it on your 2021 tax return?

Since the child was adopted in 2021, the answer to the question is "no" because the child was not claimed on the most recent (2020) return (which would apply for either a newborn or adopted child). So it would appear one would not be eligible. But that sort of doesn't make sense. Normally one can claim a child tax credit for a child born at any time during the year. Even if the child were born at 11:59 PM December 31st. If the word and had been or, then the eligibility criteria would make more sense.

The white house web page also says.

The deadline to sign up for monthly Child Tax Credit payments is November 15

I assume they mean November, 15, 2021 (since the credit wasn't signed into law until March 2021). So it appears you can get the credit even if you sign up really late in the year.

I feel like I have to be missing something here. It doesn't seem plausible that it was the intent of the government to exclude families with a child born or adopted in 2021, who also filed taxes in 2020, but include people with older children or who didn't file taxes last year.

Answer 1

Unfortunately, I don’t think you are missing anything.

I couldn’t find it explicitly stated any more clearly than what you already found on the Advance Child Tax Credit Eligibility Assistance Tool, but it appears that if you have a new child in 2021, you are not eligible for the advance payments in 2021.

However, you will still be eligible for the 2021 Child Tax Credit (assuming you meet all the other eligibility requirements), just not the advance payment of that tax credit. So when you do your 2021 tax return in a few months, you should see the money then as either a refund or a reduction of the tax you owe.

Answer 2

Babies and children born or adopted before 2021: You don't have to do anything to receive child tax credit payments, assuming that the IRS has your 2020 or 2019 tax return on file. However, even if you don't usually file taxes, you could still qualify.

Babies born or adopted between Jan. 1 and July 31, 2021: If the child was somehow reported to the IRS before the first check was sent in July, checks will follow the usual timeline shown in the chart below. However, it's more likely that the IRS wasn't informed of this new dependent; in that case, the dependent will have to be added when that option is made available on the Update Portal sometime this fall.

Babies born between July 1 and Nov. 30, 2021: Because some payments have already gone out by the time you're able to register or update your information through the portal, you'll receive all subsequent monthly payments, with the remainder coming with your tax return next spring. The IRS has announced it'll also adjust the amount of each of your remaining monthly payments to account for having missed the first several payments.

Babies born in December 2021: After the last check is sent, on Dec. 15, you'll no longer need to use the IRS portals to manage your household details and monthly payments. Instead, you'll receive the full amount when you file taxes in 2022 and claim your new dependent there.

Babies born in 2022 and beyond: Unless the expanded child tax credit is extended, parents of 2022 babies will not be receiving monthly checks or the full 2021 amount of $3,600. That means a baby born on Dec. 31 is eligible, while a baby born Jan. 1, 2022, isn't.

Are there any requirements for parents to get monthly payments? Eligibility is based on your child's age at the end of this calendar year. That means all qualifying children (there are other requirements we explain below) born on or before Dec. 31, 2021, will receive the full $3,600 tax credit over the course of 2021-2022. And parents of twins can get up to $7,200. The only variation will be in the timing and amount of each check.

The 2021 child tax credit for newborns will be capped at $3,600 total per eligible child, going down from there as your income goes up. The IRS uses different adjusted gross income phaseout limits (when your income is too high to qualify for the full amount of the credit) for single filers, heads of household and married couples filing jointly.

CNET built a calculator for determining your specific payment eligibility, which you should definitely try out, especially if you also have older children, share custody or have concerns about your income. Remember that your child's age group is based on the age at the end of this calendar year, so keep that in mind for any dependent aging into the next payment bracket at any point in 2021. For example, if your 5-year-old turns 6 in October, you'll qualify for a smaller amount. As for other requirements, you and your child must be US citizens and your child needs a Social Security number.

You can also check to see if you qualify using the Eligibility Assistant tool. Then use the Child Tax Credit Update Portal to see if you're enrolled and to update your banking information or mailing address.

Parents of 2021 babies can claim child tax credit payments. Here's how

READ THIS it explains it all the answer is yes and reading this article will tell you exactly what you need to do.