More than 36 million families could be eligible for monthly child tax credits | Business
Christmas could arrive earlier this year for the tens of millions of American families who are eligible to receive monthly child tax credit payments starting next month.
The expanded child tax credit was authorized by the American Rescue Plan Act, which was enacted in March. The IRS sends letters to over 36 million families who may be eligible based on information they included on their 2019 or 2020 federal income tax return, or who have used the non-filer tool on IRS.gov last year to register for an economic impact payment.
Families eligible for Child Tax Credit Advance Payments will receive a second personalized letter with an estimate of their monthly payment, which begins July 15.
Most families do not have to do anything to get their payment. Normally, the IRS will calculate the payment amount based on the 2020 tax return. If this return is not available, either because it has not yet been filed or because it has not yet been filed. not yet processed, the IRS will instead determine the payment amount using the 2019 return.
Eligible families will begin to receive advance payments, either by direct deposit or by check. The payment will be $ 300 per month for each eligible child under the age of 6 and $ 250 per month for each eligible child aged 6 to 17. The IRS must issue advance child tax credit payments on July 15, August 13. September 15, October 15, November 15 and December 15.
FILE SOONThe IRS recommends that individuals and families who have not yet filed their 2020 return – or 2019 return – do so as soon as possible so that they can receive any prepayment to which they are entitled.
Filing soon will also ensure that the IRS has its most recent banking information, along with key details about eligible children. This includes people who do not normally file income tax returns, such as homeless families, the rural poor, and other underserved groups.
For most people, the fastest and easiest way to file a return is to use the free file system, available only at IRS.gov.
The IRS said that throughout the summer it will add additional tools and online resources to help advance the child tax credit. One of these tools will allow families to opt out of these advance payments and instead receive the full credit amount when they file their 2021 return next year.
In addition, later this year, individuals and families will also be able to visit IRS.gov and use a Child Tax Credit Update Portal to notify the IRS of changes in their income, reporting status, or number of eligible children; update their direct deposit information; and make other changes to make sure they get the right amount as quickly as possible.
OTHER TOOLS TO COMEThe IRS has created a special Advance Child Tax Credit 2021 page at IRS.gov/childtaxcredit2021, designed to provide the most recent information on credit and prepayments.
Over the next few weeks, the page will also feature other new online tools, including:
- An interactive child tax credit eligibility tool to help families determine if they are eligible for child tax credit advance payments.
- The Child Tax Credit Update Portal, which will initially allow anyone who has been found eligible for advance payments to opt out / opt out of the early payment program. Later this year, it will allow people to check the status of their payments, update their information and be available in Spanish.
CHILDREN’S TAX CREDITThe American Rescue Plan has increased the maximum child tax credit in 2021 to $ 3,600 for eligible children under 6 and to $ 3,000 per child for eligible children between 6 and 17. Prior to 2021, the credit was worth up to $ 2,000 per eligible child, and 17-year-olds were not considered eligible children for the credit.
The new maximum credit is available to taxpayers whose modified adjusted gross income is $ 75,000 or less for singles, $ 112,500 or less for heads of households, and $ 150,000 or less for married couples filing a claim. joint declaration and eligible widows and widowers.
Plus, the entire credit is fully refundable for 2021. This means eligible families can get it, even if they owe no federal income tax. Prior to this year, the reimbursable portion was limited to $ 1,400 per child.
Scott Carroll can be reached at [email protected] or 541-957-4204. Or follow him on Twitter @ scottcarroll15.