Enhanced Child Tax Credit: What you should know
The first payments from the expanded child tax credit are set to arrive this week.
MANKATO, Minn. (KEYC) - Monthly payments are on the way for 9 out of 10 American families.
Starting July 15, the IRS will pay $3,600 per child to parents of children up to age five. That will come in monthly $300 payments through the end of 2021 and $1,800 at tax time next year.
The amount changes to $3,000 total for each child ages six through 17, or $250 per month and $1,500 at tax time. The IRS will also make a one-time payment of $500 for dependents age 18 or full-time college students up to age 24.
The amount phases out 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.
Households that filed a 2020 or 2019 federal income tax return, and claimed the regular child tax credit, will get payments automatically. But families are eligible even if they didn’t meet the income threshold to file.
“If you have a child living in your home for more than half the year - it’s also important that as long as the child has a social security number, you are eligible for the Child Tax Credit,” Robin McKinney, CASH campaign of Maryland CEO & co-founder, said.
The IRS and groups that help low-income families are working to get that word out, first pointing to the IRS website.
“Those families that traditionally have not filed a tax form can just go online, enter their information, it’s just basic information, who you are, where you live, how old are your children,” Joseph Leitmann-Santa Cruz, Capital Area Asset Builders Executive Director & CEO, said.
The enhanced Child Tax Credit will be available to about 39 million families, accounting for 65 million children, according to the Biden administration. That covers around 88 percent of the nation’s youth.
Qualifying families will receive the full amount, regardless of what they owe in taxes. And there is no limit to the number of dependents that can be claimed.
More information on the Child Tax Credit can be found on the IRS website.
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