New Baby? Does Your Newborn Come With An Advance Child Tax Credit?

Is a child born in 2021 eligible for the Child Tax Credit advance payments that start in July?
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Several Forbes.com readers have particular questions concerning the Advance Child Tax Credit (CTC) payments, which will begin in mid-July. The Internal Revenue Service (IRS) has some answers. Normally, the IRS would evaluate CTC eligibility based on a taxpayer’s 2020 or 2019 tax return, but what about a baby born in 2021? A.D., K.K., and J.R., among others, are curious. Each of them had a kid early this year, and reader A.N. is expecting a child in September (congratulations to all!). Are their newborns eligible for CTC payments in advance?
There’s good news: One of the anticipated additions for the Child Tax Credit Update Portal, which can be accessible on IRS.gov, would allow parents to add children born or adopted in 2021, according to an IRS spokeswoman. Those who are affected can visit the Advance Child Tax Credit Payments in 2021 page to learn when the boost will be available.
K.C. wondered if parents on SSI (Supplemental Security Income) with no other source of income are eligible for the CTC. “Some locations said yes and some places said no,” she said, describing the situation as perplexing.
The answer, according to an IRS representative, is yes: “The Child Tax Credit increase for 2021, which was included in the American Rescue Plan adopted in March, added a number of new features to the CTC that were not previously available. One of them is allowing families with no earned income (revenue from a W-2 employment, independent contractor labor, or owning a business) to take advantage of the credit “ADDITIONAL INFORMATION FOR YOU
Another reason why persons who aren’t required to file tax returns should use IRS.gov’s Child Tax Credit Non-filer Sign-up Tool to assist them register for the CTC is because they aren’t compelled to do so.
Reader D.S. wrote in from north of the border, asking if U.S. taxpayers who live in Canada and file U.S. tax returns are eligible for the advance CTC, noting that they had previously been eligible for the CTC.
According to the American Rescue Plan Act of 2021, you must have a primary residence in the United States for more than half of the year (2021) to be eligible for the advance CTC. Members of the military, however, are still regarded to be residents of the United States even if they are stationed abroad for an extended period of time.
B.L., a reader, explained that he and his ex-spouse claim their kid as a dependent every other year, with B.L. claiming his son for tax year 2020. He inquired as to whether he would be eligible for the advance CTC.
According to a spokeswoman for the Internal Revenue Service (IRS), “The CTC should go to the parent who claims or will claim the kid in 2021. The other parent should choose to opt out of advance payments or unenroll.”
The Child Tax Credit Update Portal service allows taxpayers to opt out of CTC payments. Also, the IRS just announced a new enhancement to the portal that allows families to amend their bank account’s direct deposit information.
Many of the readers who contacted me indicated that the CTC money would make a significant impact in their current financial conditions. If you plan to get an advance CTC, keep an eye on the IRS page Advance Child Tax Credit Payments in 2021 for the most up-to-date information.
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