2021 Child Tax Credit and Advance Child Tax Credit Payments — Topic F: Updating Your Child Tax Credit Information During 2021

A1. The IRS launched on IRS.gov a Child Tax Credit Update Portal (CTC UP), which  will allow you  to elect not to receive advance Child Tax Credit payments during 2021 and update your bank account information. More functionality will be added later this year that will allow you to:

  1. Update your mailing address;
  2. Add or subtract the number of your qualifying children, including by reason of the birth or adoption of a child;
  3. Report a change in your marital status; and
  4. Report a change in your income.

If you would like to have your payment direct deposited, but don’t have an account, many financial institutions will help you open a low-cost or no-cost bank account. Visit the Federal Deposit Insurance Corporation website for details on opening an account online or use the FDIC's BankFind tool to locate an FDIC-insured bank. BankOn, American Bankers Association, Independent Community Bankers of America, National Credit Union Administration have lists of banks and credit unions that can open an account online. See the Veterans Benefits Banking Program, if you’re a veteran, for access to financial services at participating banks.

More details will be provided regarding CTC UP through these questions and answers.

A2. Modified Adjusted Gross Income (AGI) is used to figure payment amounts for the Child Tax Credit.

Your modified AGI from your tax return was used to figure your advance payment amount for the 2021 Child Tax Credit.

Find Your Modified AGI

Your modified AGI for the Child Tax Credit equals your:

Plus (if it applies):

or

  • Any amount excluded from gross income because it was received from sources in Puerto Rico or American Samoa.

If you don’t have any of the above, your modified AGI is the same as your AGI.

A3.  Sign into the Child Tax Credit Update Portal (CTC UP), click “Manage Advance Payments,” and see “Report Life Changes.”

A4. Your advance payment amount will be adjusted to match your updated modified Adjusted Gross Income (AGI).

  • If your updated modified AGI is higher: Your advance payment amount may decrease.
  • If your updated modified AGI is lower: Your advance payment amount may increase.

A5. Your advance Child Tax Credit payments are based on the modified Adjusted Gross Income (AGI) from your tax return or from life changes you report to us. If you expect your modified AGI for 2021 to be different from the 2020 modified AGI, you may want to provide an update in the Child Tax Credit Update Portal (CTC UP). If your income has significantly increased, an update will adjust your remaining advance payments to help prevent owing additional tax when you file your 2021 tax return in 2022.

Consider reporting a change to your modified AGI only if:

  • You expect your modified AGI in 2021 to be higher than the following threshold; or
  • Your modified AGI in 2020 was higher than the following threshold.
Modified AGI Threshold for Calculating Payment Amounts for the 2021 Child Tax Credit
Filing Status Modified AGI Threshold
Single or Married Filing Separately $75,000
Head of Household $112,500
Married Filing Jointly or Qualifying Widower $150,000

A6. You can make changes if you plan to file Married Filing Jointly on your 2021 tax return with the same person on your 2020 tax return. In that case, only one of you needs to report changes to your modified Adjusted Gross Income (AGI). The update will apply to both of you and will affect both of your payments.

A7. Yes, if you provide your updated income by using the Child Tax Credit Update Portal (CTC UP). Later in 2021, this online portal will allow you to update income you plan to report on your 2021 tax return so that we can change our estimate of your 2021 Child Tax Credit. This will allow us to change the amount of your monthly advance Child Tax Credit payments. More details will be provided regarding CTC UP through these questions and answers.

A8. Your first advance Child Tax Credit payments will be based on the children you claimed for the Child Tax Credit on your 2020 tax return (or 2019 tax return, if your 2020 tax return has not been processed as of the payment determination date for any of your monthly advance Child Tax Credit payments).

Later this year, the Child Tax Credit Update Portal (CTC UP) will be updated to allow you to inform us about the qualifying children you will claim on your 2021 tax return so that we can adjust your estimated 2021 Child Tax Credit – and therefore adjust the amount of your monthly advance Child Tax Credit payments.

If you do not receive advance Child Tax Credit payments for a qualifying child you will claim in 2021, you may claim the full amount of your allowable Child Tax Credit for that child when you file your 2021 tax return.

More details will be provided regarding CTC UP through these questions and answers.

A9. The Child Tax Credit Update Portal (CTC UP) will allow you to unenroll from receiving advance Child Tax Credit payments. More details will be provided regarding CTC UP through these questions and answers.

A10. Beginning in July 2021, the IRS started making advance monthly payments of the 2021 Child Tax Credit to taxpayers.  For many taxpayers, the amount of the 2021 Child Tax Credit also has increased compared to the amount of the 2020 Child Tax Credit.  However, the total advance payments may be greater than any increase in the 2021 credit, depending on a taxpayer’s circumstances.  For taxpayers in this situation who do nothing in 2021 to adjust income tax withholding from their pay (and do not unenroll from advance monthly payments), the amount of their tax refund received in 2022 may decrease compared to the refund received in 2021, or the balance due in 2022 with their 2021 income tax return may increase compared to the balance due in 2021.  Some taxpayers also may shift from getting a refund in 2021 to owing a balance in 2022.

Therefore, taxpayers who received a small refund or had a balance due when they filed their tax return for 2020 in 2021 should consider unenrolling from advance Child Tax Credit payments, updating their Form W-4 by entering an additional amount to be withheld each pay period on step 4c of the form, or making quarterly estimated tax payments for the remainder of 2021.

For more information about how your advance Child Tax Credit payments are calculated and disbursed, see Topic D: Calculation of Advance Child Tax Credit Payments, and Topic E: Advance Payment Process of the Child Tax Credit.​​ ​​​ ​You can unenroll from advance Child Tax Credit payments through the Child Tax Credit Update Portal (CTC UP). For more information regarding the CTC UP, see Topic F: Updating Your Child Tax Credit Information During 2021.