When to Expect Your Sixth (and Possibly Last) Child Tax Credit
The sixth – and possibly final – payment for the Child Tax Credits program is due to be paid into the bank accounts of the respective parents today, December 15th. Those who have received checks in the mail can expect them to arrive within the next few days.
What will your December child tax credit be?
As with previous payments, most eligible applicants will receive $ 300 or $ 250 depending on the age of their child. Under the current program, parents with children under 6 will receive a total of $ 3,600 in tax credit in 2021, half of which will be paid monthly and half must be claimed on 2021 tax returns. Parents with children from 6 to 17 years old receive $ 3,000 in the same way.
Is the STS payment for December the last one?
Future payments of the child tax credit are in limbo. The benefit expansion is part of the Recovery Efficiency Act, which is currently under discussion in Congress. If this becomes the law, the payments of the STS will be carried out for another year. If it doesn’t pass, the child tax credit will return to pre-pandemic levels: a $ 2,000 a year tax credit with no monthly payments.
Who is eligible for the Child Tax Credit?
The benefits are targeted at low- and middle-income families, with the full benefit for single parents earning less than US $ 95,000 and couples earning less than US $ 170,000 per year. Higher earnings receive lower amounts depending on their income.
How can I apply for Child Tax Credit?
Unless they waived their monthly payments, eligible taxpayers were automatically enrolled in the program in July of this year. Those who choose not to take monthly payments can still reap the full benefit in the form of a loan applied to 2021 taxes.
Are Child Tax Credits Taxed?
CTC payments are tax-free as the IRS considers them to be a tax credit advance payment, not income.
One potential pitfall to be aware of: CTC eligibility and benefits were based on income reported on your 2020 tax return. If you earn enough in 2021 to put you in a different category or disqualify you, you may be earning more than you are entitled to and you will have to make up for the tax difference for 2021.
How Child Tax Credit Will Affect Your Tax Return
In January, the IRS will send Letter 6419 to all citizens who received CTC payments in 2021. This letter details the amount of CTC payments you received. According to the IRS, you must keep this letter in order to refer to it when filing your 2021 tax return. Entering the wrong amount for your CTC payment may delay the dispersal of your federal tax refund.