SOI Tax Stats – Advance Child Tax Credit Payments in 2021


Advance Child Tax Credit Statistics

Section 9611(a) of the American Rescue Plan Act of 2021 (Act), Public Law 117-2, 135 Stat. 4 (March 11, 2021), amended the Child Tax Credit (CTC) rules under section 24 of the Internal Revenue Code (Code) for taxable year 2021. For taxpayers who have a principal place of abode in the U.S. for more than half the year or who are bona fide residents of Puerto Rico for the year, the Act made the CTC fully refundable. The Act increased to age 17 the maximum age for which a child may be a qualifying child for the CTC. The Act also increased the maximum amount of the CTC from $2,000 to $3,600 for qualifying children under age 6 and to $3,000 for other qualifying children under age 18. Special rules are provided for U.S. Territories and their residents.

The CTC phases out in two different steps based on the taxpayer's modified adjusted gross income (modified AGI) in 2021. The first $1,600 of the CTC per qualifying child under age 6 and the first $1,000 per qualifying child age 6 through 17 phase out sequentially at a rate of $50 per $1,000 (or part thereof) of modified AGI in excess of a threshold based on the taxpayer's filing status. The modified AGI threshold is $150,000 for married joint filers or qualifying widows or widowers, $112,500 for head of household filers, and $75,000 for all other filers. The remainder of the CTC, plus any amount of non-refundable $500 credit for other dependents, is further reduced by $50 for each $1,000 (or part thereof) that exceeds $200,000 ($400,000 for married taxpayers filing a joint return) of modified AGI. Larger families follow a modified phaseout rule that extends the AGI range of the phaseout.

Section 9611(b)(1) of the Act added section 7527A to the Code. Solely for 2021, section 7527A(a) requires the Secretary of the Treasury to establish a program for making periodic advance payments of the CTC, the total amount of which equals the taxpayer's "annual advance amount." The "annual advance amount" of a taxpayer is the amount estimated by the Secretary as being equal to 50 percent of the CTC that would be allowed to the taxpayer for 2021 based on information reported on the taxpayer's 2020 Federal income tax return (or their 2019 return if the 2020 return is not available). The Internal Revenue Service (IRS) disbursed these advance payments from July to December of 2021. The taxpayer must file a Tax Year 2021 return to claim the remainder of their CTC (if any). Taxpayers could use a designated IRS online tool, referred to as the "Child Tax Credit Update Portal," to opt out of advance payments. A taxpayer's Federal income tax is increased, dollar-for-dollar, if their total CTC advance payments during 2021 exceed the amount of the CTC to which they are eligible for that year. However, safe harbor rules may reduce the additional income tax owed depending on the taxpayer's modified AGI.

The numbers shown in the tables on this page reflect advance CTC payments disbursed during 2021 to eligible recipients based on taxpayer account information. In these tables, payments refer to the number of primary payment recipients that received one or more advance CTC payment during 2021. These tables include payments issued in each monthly payment wave, as well as any payments made outside of the monthly payment, such as replacements for undeliverable payments. If a tax unit filed a joint return and each spouse received part of a payment, then these tables count that as a single payment, and the dollar amounts of the partial payments to the spouses are added together. For example, if two spouses who filed jointly each received $750 in payments during the year, then these tables report a single payment of $1,500. If a married couple received advance CTC payments based on a Tax Year 2019 joint return and then later based on a Tax Year 2020 joint return and if the couple changed which spouse was listed as the primary (secondary) filer across the two returns, these tables report a single payment.

AGI, state, and filing status come from the Tax Year 2019 or 2020 return used to determine an individual's eligibility for and amount of the advance CTC payments. For individuals initially disbursed a payment based on Tax Year 2019 return information and later disbursed a payment based on Tax Year 2020 return information, the individual's AGI, state, filing status, and number of qualifying children are associated with the individual's Tax Year 2020 return information.

Advance Child Tax Credit

Table 1: Classified by Adjusted Gross Income

Total, Calendar Year 2021XLS

Table 2: Classified by State

Total, Calendar Year 2021XLS

Table 3: Classified by Filing Status

Total, Calendar Year 2021XLS