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.
The improved credit is expected to cut child poverty by almost half by 2021, experts say.
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:
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.
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.
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.
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.
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.
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 portal has been criticized because the tool is only in English and does not work well on cell phones.