When to Expect $ 3,600 Checks for Child Tax Credit
The IRS has confirmed that families can expect their 2021 Child Tax Credit subsidy to start being paid in advance monthly payments in July rather than next year as part of their tax return. Monthly benefits have also increased from $ 2,000 to $ 3,600 per child. Here’s what you can expect and how to qualify for this incentive loan.
Why do monthly payments start in July?
The Child Tax Credit is a tax credit for families with children, and by 2021 – under the US Rescue Act – these payments have been increased to a maximum of $ 3,600 per child. It is noteworthy that this is a repayable loan, which is paid monthly in cash for six months, starting in July. However, when the bill was passed, it was not clear that the IRS could handle monthly payments at all . IRS Commissioner Charles Rettig yesterday confirmed to Congress that the agency is now ready to send out checks this summer.
This means that families eligible for the Child Tax Credit will receive six monthly payments in 2021, coming in from July to December. The other half of the total annual loan may be reclaimed when families file their 2021 tax return in 2022.
How can I qualify?
Eligibility and the amount you receive will depend on your household income for 2020 and the age of your children. In tax year 2021, families are eligible for a loan of up to $ 3,600 for each child under the age of six and $ 3,000 for each child under the age of 18 – an increase from the previous loan amount of up to $ 2,000 for a child under the age of 17. Children 18 who are also considered dependents, and full-time college students between the ages of 19 and 24 are also eligible, but only for $ 500 per CNET .
However, these payments have phased cancellation built in, which means you get a lower payout if your 2020 adjusted gross income is more than $ 75,000 for single parents or $ 150,000 for married couple filing together (you will lose $ 50 credit for every $ 1,000 of income above the WSJ threshold). To find out how much you can qualify for below this threshold, check out this Child Tax Credit Calculator (which for some reason doesn’t include estimates for children over 17). According to CNET , there are other requirements for members:
- The child you require must live with you for at least six months a year.
- Both you and your child must be US citizens.
- Powell said at least one spouse must have a Social Security Number, or ITIN, to jointly apply for married couples.
- The child must also have a Social Security number – a child with only ATIN will not be eligible (including foster children).
- Parents who have joint custody of a child cannot receive a tax credit.
Finally, since this is a time-limited 2021 tax year loan, you need to file your 2020 tax return, at least for now, as this is currently the only way to prove to the IRS that your child is eligible for the loan.
The IRS will create an online portal for income adjustments.
These payments are technically an upfront payment based on your projected income and the number of children you have now , but both may change for you later this year. For this reason, the American Rescue Plan requires the IRS to create an online portal where you can update your income, marital status, and eligible children. The portal, which is expected to launch on July 1, will make and track payments and reconcile payments against the taxpayer’s credit taken on tax returns.