Child tax credit starts hitting US families’ bank accounts
Family finances. Most families now qualify for monthly payments of as much as $300 per child.
| 18 Jul 2021 | 07:21
The U.S. government is starting to deposit child tax credit money into the accounts of more than 35 million families. President Joe Biden has expanded the credit for one year as part of coronavirus relief.
The result is that most families now qualify for monthly payments of as much as $300 per child. Biden is seeking to extend the payments and make them permanent. He says that would cut child poverty in half and help economic growth. Some Republican lawmakers say the payments will make parents less likely to work.
● The American Rescue Plan expanded the child tax credit to up to $3,600 per child for children ages 0 to 5 and $3,000 per child for children ages 6 to 17.
● It also authorized advance monthly payments. Working families get up to $300 per month per child July through December, with the remaining amount to be delivered after filing their taxes next year.
● Eligible families who filed a 2019 or 2020 tax return should get their monthly payments automatically with no further action required.
● Families who did not file a tax return for 2019 or 2020 and who did not use the IRS Non-filers tool last year to sign up for the Economic Impact Payments should go online and use the IRS Child Tax Credit Non-filer Sign-up Tool to sign up (irs.gov/credits-deductions/child-tax-credit-non-filer-sign-up-tool)
● Families will get their remaining expanded child tax credit when they file their 2021 tax return.
● Families will qualify for a full credit if their income is below $75,000 for single filers, $112,000 for people filing as head of household, or $150,000 for people who are married and filing jointly.
● To be eligible, children must have a Social Security number, live in the household for at least half of the year, be under age 18 as of Dec. 31, 2021; and be claimed on the family’s tax return.
● Children are eligible if they are your children, adopted children, stepchildren, half-siblings, grandchildren, nieces or nephews, or certain other relatives. The adult tax filer must have a Social Security Number or an Individual Taxpayer Identification Number.
● The new child tax credit for 2021 newborns will be capped at $3,600 per eligible child. If the baby is expected after the first checks go out, families can use the Child Tax Credit Update Portal (irs.gov/credits-deductions/child-tax-credit-update-portal) to update the amount of qualifying children/dependents they have.
● Households with adult dependents also are eligible in certain cases. More information is available on the IRS website.
● The child tax credit will not affect disbursement of SNAP/Food Stamps, Medicaid, TANF Cash Assistance, SSI, or other public benefits.
● Watch out for scams. According to IRS.gov: The only way to get either of these benefits is by either filing a tax return with the IRS or registering online through the Non-filer Sign-up tool, exclusively on IRS.gov. Any other option is a scam.