Most eligible U.S. families began receiving Child Tax Credit payments on July 15, a historic tax relief geared toward reducing child poverty, especially at a time when many are struggling financially as the pandemic’s impact lingers.
The Child Tax Credit, first enacted in 1997, aims to benefit low- and moderate-income families. It had been amended several times over the years for criticisms that it had been failing to reach the neediest.
Under the American Rescue Plan, the Child Tax Credit was expanded to support the poorest families. Most families with children qualify without having to take any action, including parents who pay little to no federal tax. Previously, the credit was partially refundable, but in 2021, it will be fully refundable.
For this year, the maximum annual credit increased from $2,000 per child under age 17 in 2020 to $3,000 for each child ages 6 to 17, and $3,600 for each child under age 6. This will be distributed as advance monthly payments of up to $250 per child ages 6 to 17, and $300 per child under age 6 through the end of 2021. After that, the remainder of the credit will be paid out in the 2022 tax season.
Married couples with income under $150,000, single parents or heads of households with income under $112,500, and all other families with income under $75,000 qualify for the full credit. Meanwhile, married couples with income under $400,000, single parents or heads of households with income under $200,000, and all other families with income under $200,000 qualify for at least $2,000 of credit, which comes out to $166 per child each month.
The Internal Revenue Service (IRS) will send payments as a direct deposit to the bank account they have on file. If they don’t have your bank account information, a check will be mailed to you. The rollout started in July and will go out every 15th of the month. In August, the payment will go out on the 13th since the 15th falls on a weekend. To check for your eligibility or manage your payments, visit the IRS page on Child Tax Credit.
If you require assistance in filing your taxes for 2020 to qualify for the credit, our team of experts at Stephano Slack will gladly assist you. Send us a message at firstname.lastname@example.org. To learn more about our services, visit www.stephanoslack.com/services.
Reference: The White House, The Child Tax Credit, Retrieved July 17, 2021, from https://www.whitehouse.gov/child-tax-credit/