Federal child tax credit payments are due to be paid out in July, potentially adding thousands of dollars to parents’ pockets by the end of the year.
President Joe Biden’s American bailout plan expanded the child tax credit so people could receive larger payments and payments were remitted monthly rather than being claimed for next year’s taxes. Amid concerns that the Internal Revenue Service’s overwork could delay payments, the agency confirmed that checks would go out from July, as the bill mandates.
Vice President Kamala Harris confirmed that payments would be made over the next month through the White House investment in childcare.
“People have to pay the bills every month, so we’re making it really real and connected with the demands and pressures of being parents and raising families, especially with young children,” said Harris. “We want to make sure that every family with children who is eligible for this tax credit receives this tax credit because it naturally deserves it and because it will help us out with half of the children I mentioned earlier living in poverty rid of poverty. “
Child tax credit payments are slated to expire next month and potentially put thousands of dollars in parents’ pockets by the end of the year. Twenty and five dollar bills are displayed in this photo illustration on August 29, 2017 in San Anselmo, California.
Justin Sullivan / Getty Images
The child tax credit was already on the books when Congress passed the US bailout plan in March, but the relief package expands payments. It increases payments for children under 6 to $ 3,600, an increase of $ 1,600 from the standard loan, and payments for children 17 and under are $ 3,000, an increase of $ 1,000.
However, not all are eligible for the increased payments. To qualify for full payments, an individual must earn less than $ 75,000 and common applicants have an income cap of $ 150,000. People with a higher income receive a reduced payment. If you are not entitled to full payment, you can claim the standard credit in your 2021 tax return.
Kiplinger and CNET both have online calculators that people can use to determine how much they should get in the expanded child tax credit. At the calculators, an individual must enter their enrollment status, the number of eligible children they will have as of December 31, and their gross adjusted income.
About 39 million households are expected to see the payments, according to the IRS, and the money should be spent on July 15th. They will continue to be made on the 15th of each month, unless the 15th falls on a weekend or holiday.
Payments are 1/12 of the total amount an individual is likely to owe, with the last payment being made in December. Eligible taxpayers will receive the second half of the money they are due after filing their taxes in 2021.
Monthly payments are $ 300 for each child under the age of 6 and $ 250 for each child between the ages of 6 and 17. The IRS estimates the payments are expected to lift more than 5 million children out of poverty this year, and the Biden government is considering keeping them up for the next four years.