The IRS and Treasury stated that in mid July many families with children should begin to receive money in their accounts. This is, of course, applying to low and mid income families and is regarding receiving monthly advances of $250 or $300 due to the new expansion of the Child Tax Credit which started on July 15.
Officials said that these will be monthly payments and be delivered primarily via direct deposit. However, if a family is not able to receive it in that way, it will be given via a check or debit card. They expect these payments to be made through December.
President Biden said that, “This tax cut sends a clear and powerful message to American working families with children: Help is here.”
Most people have heard of President Biden’s American Rescue Plan which Congress passed in March for aid towards COVID-19 relief. The plan comes in just under two million dollars of aid of which include these monthly payments under the Child Tax Credit. The law also extended the amount of eligible families that it would be extended to.
Previously the tax credit that was offered was $2,000 per child under the age of 17 and that was qualifying. However, under the new law, it will be up to $3,000 for children between 6-17 and up to $3,600 for children under 6 years old.
This will not apply to and begin to phase out people within these salary brackets:
- Individuals earning $75,000+
- Heads of household earning $112,500+
- Married couples filing jointly that earn $150,000+
The American Rescue Plan has helped with family eligibility because before they had to wait until they filed income taxes.
But under this new law, half of the money is being paid in these monthly advancements. Families that are eligible will receive:
- Up to $300 for kids under 6 years old
- Up to $250 for kids 6 years and older
It is estimated the eligible families will cover around 88% of children in the U.S. and around 39 million households. The IRS will use past tax returns to calculate family eligibility. They will use 2020 returns, or 2019 if the 2020 returns have not been filed or processed yet.
If you think that you are eligible and have already filed your taxes, you do not need to do anything else. The payments will be sent automatically. Congress stated that they believe that around 80% of eligible families will be receiving their payments via direct deposits.
The IRS has created an online portal to help with certain issues. For example, if eligible families prefer to receive the credit only once when they file their taxes, they will be able to opt out of the monthly advances through the portal. Starting late in the summer the online portal will also help families be able to update their information about changes in income, number of children, or filing status as well. Click here in order for more specifics on dates these changes are supposed to take effect.
The IRS Advance Child Tax Credit Portal is available now. There are three main things it allows you to do currently, and once you click the button, it gives you specific directions and guidelines to follow, know if you are doing it correctly, and what paperwork you will need available while submitting your request. In August, you will be allowed to make changes to your residence address, and in late summer you will be able to update dependents, marital status, income, and re-enroll if you had opted out.
Are you wondering if you or your family might be eligible for child tax credit? Or maybe you need help navigating the online portal. Be sure to reach out to your CPA, or talk to us so we can review the portal with you. We can be reached at 310-534-5577 or [email protected].
Find more information from the source of this article here:https://www.usatoday.com/story/news/politics/2021/05/17/child-tax-credit-monthly-advance-payments-start-arriving-july-15/5122943001/
