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Child tax credit: third payment provided for families

Most parents will automatically receive enhanced credits of up to $ 300 for each child up to age 6 and $ 250 for each age 6 to 17. The Internal Revenue Service is expected to send three more monthly payments in 2021.

But low-income households may not get the payments if they haven’t filed 2020 or 2019 tax returns or used the IRS tool to claim their coronavirus stimulus checks. According to the Treasury Department, up to 2.3 million children could belong to these families.

They can go to or an IRS portal to provide the information needed to receive the funds.
The expanded child tax credit, which was created as part of Democrats’ $ 1.9 trillion relief plan in March, is only in effect for 2021. But lawmakers are looking to extend payments monthly through 2025 as part of the party’s $ 3.5 trillion budget reconciliation bill. .

The improved credit is expected to cut child poverty by almost half by 2021, experts say.

If extended, 4.3 million fewer children would be in poverty in a typical year, according to a recent analysis by the Urban Institute. The child poverty rate would drop from 14.2% to 8.4%, a reduction of over 40%.

There is already evidence that payments have an impact: a smaller proportion of households with children report that they sometimes or often did not have enough to eat in the last seven days than before the start of household payments. mid-July, according to the Census Bureau’s Household Pulse Survey.

Here are four more things you need to know about the expanded child tax credit:

Who qualifies?

The full enhanced credit is available for heads of households earning up to $ 112,500 per year and joint filers earning up to $ 150,000, after which it begins to disappear.

For many families, the credit then tops out at $ 2,000 per child and begins to wane for single parents earning over $ 200,000 or for married couples with incomes over $ 400,000.

More low-income parents are eligible for the child tax credit because the relief made it fully refundable. It had only been partially repayable – leaving more than 26 million children unable to get full credit because their families’ incomes were too low, according to Treasury Department estimates.

About half of black and Latino children, as well as children living in rural communities, received only partial or no credit because their families’ incomes were too low before the improvement, the Center said. left wing on the budget and politics. Priorities.

The provision means that a single mother with a toddler and a sophomore earning $ 12,000 a year would see her credit increase to $ 6,600 for 2021, from about $ 1,425, according to the center.

The Democrats’ budget reconciliation package aims to make the credit fully repayable on a permanent basis.

RELATED: New Child Tax Credit Payments to Be Made. Here’s how the IRS tries to make sure families most in need don’t miss out

Parents who are not citizens can receive payments for their citizen children as long as they have Individual Tax Identification Numbers (ITINs) and their children have Social Security numbers.

Families can check their eligibility through this IRS website.

How much will I get?

It depends on your household income and the size of your family.

Eligible families can receive up to $ 3,600 for each child under age 6 and up to $ 3,000 for each age 6 to 17 for 2021. This is an increase over the credit for Regular child tax of up to $ 2,000 for each child up to age 17.

RELATED: How Much Will Your Child Tax Credit Be? Use this calculator

When will I see the money?

Parents will receive half of their credit on a monthly basis until the end of the year. Payments will be made on the 15th of each month, unless it falls on a weekend or a holiday.

They can claim the other half when they file their 2021 taxes next year.

Parents can check if they are registered to receive advance payments on an IRS portal. They can also use it to provide or update their bank account information.

Those who don’t get their monthly payments until later in the year will still get half the credit in 2021.

Families who wish to receive the payments as a lump sum can opt out of the monthly payments on the IRS portal.

Some parents may not want to receive the monthly payments, especially if their income increases this year. Payments are credits for family tax payable for 2021, but are based on 2020 or 2019 income and household size. Some who get the early credits could end up receiving much lower repayments – or even owing taxes – next spring when they file their 2021 returns.

The IRS advises parents whose income or circumstances change during the year to update their information through the agency’s portal when it adds the functionality. The IRS can then adjust the monthly payments accordingly.

Lawmakers, however, have protected low-income parents from potential overpayments. Heads of household earning $ 50,000 or less and joint filers with income of $ 60,000 or less will not need to repay overpayments.

Do I have to do something to get it?

The vast majority of families get the credit automatically because they filed 2019 or 2020 returns claiming the credit.

The IRS also sends payments to Americans who previously used its non-filer portal to register for dunning checks.
RELATED: August Child Tax Credit Payments Reach About 61 Million Children
But families who haven’t filed taxes recently or haven’t used the no-report tool need to take action. They can use another IRS portal to enroll and receive the enhanced child tax credit. The registration tool allows users to provide the necessary information about their households and, if desired, their bank accounts so that the agency can directly deposit the funds.
Parents can also go to to file simplified returns and apply for enhanced credit. The site, which launched earlier this month, was developed by the nonprofit Code for America, in conjunction with the White House and the Treasury Department. It is available in English and Spanish.

The IRS portal has been criticized because the tool is only in English and does not work well on cell phones.