Families to Start Receiving Monthly Payments Soon: Here’s What To Know
Next month many families will start to see a a little extra money in their bank account.The Child Tax Credit in the American Rescue Plan will start next month providing direct payments and an expanded tax credit for working families. Here’s some answers to some frequent questions and resources to help get you up to speed!
What is the Child Tax Credit?
Most families are familiar with the $2,000 credit they receive on their taxes each year for each of their dependent children. This year, however, the American Rescue Plan increased that credit to $3,000 per child for children over the age of six and from $2,000 to $3,600 for children under the age of six, and raised the age limit from 16 to 17.
PLUS, instead of taking the entire credit as part of your tax return next spring, the IRS will be paying half of the credit directly to families in advance via automatic monthly payments.
How Much Will I Receive?
In general, you can expect $300 per month for each qualifying child age 5 and younger and $250 per month for each qualifying child aged 6-17.
When Will Payments Begin?
Most families can expect 6 months of advance payments. The IRS will issue the first advance payment on July 15, 2021.
Who is Eligible?
Working families who make up to $150,000 for a couple or $112,500 for a family with a single parent (also called Head of Household). You can check your eligibility here.
How Do I Sign Up?
You do not need to take any action if you have either filed a tax return or 2019 or 2018, OR if you signed up to receive a stimulus check from the Internal Revenue Service.
What if I didn’t file taxes in 2019 or 2020?
If you have at least one qualifying child and earned less than $24,800 as a married couple, $18,650 as a Head of Household, or $12,400 as a single filer, you can use the IRS Non-filer Sign-up Tool to get the Child Tax Credit and receive missing stimulus payments.
How Long Will Payment Last?
The expended Child Tax Credit is only approved for 2021, however President Biden has proposed that it continue for future years in his American Families Plan.
What If I Don’t Want Automatic Payments?
Maybe you would prefer a lump sum credit on your tax return or perhaps your tax situation has changed? No worries, you can unenroll here.
More Questions?
The White House has put together a really easy to navigate guide with examples, frequently asked questions, and a ton of info about the Child Tax Credit. Check it out here.
The IRS FAQS regarding the 2021 Child Tax Credit and Advance Child Tax Credit Payments