In March, President Biden signed into law the American Rescue Plan. Among other provisions, the $1.9 trillion relief bill boosted the child tax credit. Previously, the credit was worth up to $2,000 for every child under the age of 17, but the new law allows for a credit of up to $3,600 for children under the age of 6, and $3,000 for every child between 6 and 17 years old.

Half of the money—about $250-$300 per month—will be paid out in six cash installments beginning July 15 with five more payments on or about the 15th of each month from August through December of this year, for a total of up to $1800 per child. Families will get the remainder of the money as a tax credit when they file their 2021 tax returns.

As you would expect, there are income limits on eligibility for these tax credits. Individuals earning $75,000 or less, married couples making $150,000 or less, and a single parent filing as the head of household making up to $112,500 are eligible for the new tax credits. For instance, a family earning less than $150,000 with a 5-year-old and an 11-year-old would be eligible for a credit of $6,600. They would receive payments of $550 per month from July through December, and then $3,300 as a credit against taxes owed when they file their tax return next year. Higher-income earners still qualify for a $2,000-per-child tax credit, which starts to phase out for single adults earning $200,000 and married couples earning $400,000.

Income eligibility for the expanded child tax credit will be based on tax returns from 2019 and 2020. Families earning more money in 2021, which puts them over the income limits, need to be aware that if they are overpaid by the IRS, they will have return that money next April when tax day rolls around again. “If you receive a total amount of advance Child Tax Credit payments that exceeds the amount of Child Tax Credit that you can properly claim on your 2021 tax year, you may need to repay to the IRS some or all of that excess payment,” the IRS says on its website.

To get the cash payments, the vast majority of families won’t have to do anything. The IRS says, “We’ll use information you provided earlier to determine if you qualify and automatically enroll you for advance payments. You do not need to take any additional action to get advance payments.” If your 2021 information hasn’t changed—you have the same address, the same bank account number, your income is about the same, and you have the same number of kids, you’re probably all set. However, if something has changed, you should go to the IRS “Child Tax Care” web portal and update your information. This portal also allows you to find out if you’re eligible to receive advance payments.

The IRS estimates that 88% of all U.S. children will be eligible for the expanded tax credit, which translates to about 39 million American families.

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