Did you Know Child Tax Credits start in a couple of days?
The truth is about half of the people eligible for these payments don’t’ realize that they can get them! But, when July 15th gets here, American families with dependents will begin to receive the first installments of up to $3600 per child. This is all part of the pandemic aid passed by congress to help parents pay for child care.
You may want to make sure that you have taken the steps necessary to receive what you are owed.
That’s where the Child Tax Credit Update Portal, Child Tax Credit Non-Filer Sign-Up Tool, and Child Tax Credit Eligibility Assistant — three tools recently launched by the Internal Revenue Service (IRS) — come into play.
What is this new benefit worth?
Per the legislation, the IRS will pay up to $3600 per child to parents of children up to the age of 5. Half of this amount will come as monthly payments for the rest of this year and the other half will be received as a 2021 tax credit. In other words, through the end of the year parents of children up to age 5 will receive $300 per month per child and another $1800 per child at tax time.
If your children are between the ages of 6 to 17 years old, parents will receive $250 per month and $1500 at tax time. There is even assistance for dependents aged 18 or full-time college students through the age of 24.
Does Income affect the benefit?
Yes. Payments are based on the modified adjusted gross income on your 2020 tax filing. The amount is reduced at a rate of $50 for every $1,000 of annual income beyond $75,000 for an individual and beyond $150,000 for a married couple. Here is a great thing about the benefit… Qualifying families will receive the full amount, regardless of how much or little they owe in taxes. There is no limit to the number of dependents that can be claimed.
Tools to help you check on or claim your benefit
Qualified parents who have filed taxes in 2019 and/or 2020 or signed up for a previous stimulus check will automatically receive their advance Child Tax Credit payment from the IRS. If the information they have on file is up to date, no further action is needed.
The Child Tax Credit Update Portal allows users to make sure they are registered to receive advance payments. It will also let recipients unenroll from advance payments in favor of a one-time credit when filing their 2021 taxes
The Child Tax Credit Non-Filer Sign-Up Tool is to help parents of children born before 2021 who don’t typically file taxes but qualify for advance Child Tax Credit payments. That means parents who have not filed their 2020 taxes, are not required to file and don’t plan to file.
The Child Tax Credit Eligibility Assistant lets parents check if they are eligible to receive advance Child Tax Credit payments. Users will need a copy of their 2020 tax return or, barring that, their 2019 tax return. It’s also fine to estimate income and expenses from the appropriate tax year, though the result may not be accurate.