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What's the Scoop on the 2021 Child Tax Credit Payments

You’ve probably heard about the $3,000 ($3,600 for kids aged 6 and under) advanced payments of the Child Tax Credit that each family will be receiving per child starting in July and ending in December.

This is part of the American Rescue Plan of 2021 as a way to provide assistance to families during the pandemic.

This is not like any of the previous stimulus payments we’ve seen before so listen up and pay attention to see if this payment will be beneficial to you.

In previous years, the Child Tax Credit (CTC) used to be a $2,000 tax credit meant to lower your tax liability. If your tax liability was reduced to $0 because of this credit, then you can potential receive up to $1,400 of that credit back in the form of a tax refund. Each dependent child under the age of 17 could earn a $2,000 tax credit. If you’re a super earner, Adjusted Gross Income (AGI) of $400,000 on a joint return or $200,000 as a single or head-of-household return, then the credit will phase out.

Opt In/Opt Out

If you are eligible for the payment, you will likely get a letter in the mail saying so and no further action is required. If you would like, you can opt out of these payments. If you opt out, you will be eligible for the full refundable tax credit when you file your 2021 Tax Return. You can go to for further information and to unenroll if you desire.

Maximize Your Refund

This tax payment could be a game changer for man families. This money has no limitation on how you can use it. The sky is the limit. Use it to catch up on bills, pay off debt or to build that savings stash. Another option is to open up a Custodial Brokerage Account for your child and add the CTC payment into their account each month.

If you were to invest your advanced payments of the Child Tax Credit (CTC) into a Custodial Brokerage Account and purchase stocks for a 6 year old, by the time they retire, that account would have grown to $311,947. This estimation is assuming that you never add another penny to this account, the retirement age is 62 and the Custodial Brokerage Account earned 10% annually.

Opening and funding a custodial account is a gift that will continue to grow and benefit your child.

Remember, if you have more than one child, you will need to open a Custodial Brokerage Account for each child.

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