Child tax credit – two important IRS portals will help you make sure you get the full amount of money you're entitled to
TWO vital IRS portals will help parents get boosted child tax credit – and ensure they get the FULL amount of money they're entitled to.
President Joe Biden said that American families will automatically receive monthly payments of up to $300 per child from July 15 under a new tax break.
There have been "important changes to the child tax credit that will help many families receive advance payments starting this summer," says the IRS.
And eligible Americans can get $3,600 in child tax credit in a lump sum instead of monthly payments.
The payments are a key part of Democrats' Covid aid bill passed in March, to help families recover from the punishing pandemic.
The monthly checks of up to $300 per child for millions of families are part of an ambitious attempt to shrink child poverty in the US.
The expanded CTC payments are due to begin going out to eligible families from July 15. The credit will include children who turn age 17 in 2021.
The IRS will open two portals for families with qualifying dependents who are eligible, where they can update information and opt out of the monthly payments.
These portals will help make sure you get the full amount of child tax credit money you're entitled to receive, explains CNet.
One portal enables Americans to stop the monthly tax credit and get a bigger payout instead.
A second portal will be opened for people who don't usually file income taxes, allowing them to give the IRS updated information, like the ages of their qualifying dependents.
When will I get 2021 child tax credit?
The cash is automatically set up to be issued monthly from July until December and the second half will then land in bank accounts next year.
The monthly checks of $250 to $300 will start from July 15, unless you opt out.
If you do opt out, keep in mind you'll then only receive the lump sum in 2022 after the IRS processes your 2021 tax return.
The full payment will arrive with your tax refund, or it could be used to offset any taxes you owe.
An online portal will be set up in July so taxpayers can get the credit when they file their income taxes and opt out of advance payments.
Who’s eligible for child tax credit?
MOST families are eligible for CTC, as long as the children are either a US citizen, US national, or a so-called US resident alien.
The children must also have lived with the person who's claiming for more than half of the tax year and be claimed as a dependent on the tax return.
This can be a son, daughter, stepchild, foster child, brother,
sister, stepbrother or stepsister, but may also be a grandchild, niece or nephew.
You can check if you're eligible for the credit by using an IRS online tool.
To use it, you'll need to know your filing status, whether you can claim the person as a dependent and the person's date of birth.
As part of the American Rescue Plan, the Child Tax Credit provisions will increase the payments and greatly expand the number of families eligible.
The practical result will be direct payments for each child to families ranging from impoverished to solidly middle class $3,600 per year for youngsters under the age of six and $3,000 per year for older children.
Roughly 39 million households will receive at least partial payments, covering an estimated 88 per cent of American kids.
Columbia University's Center on Poverty and Social Policy estimates the cash infusions could lift 45 per cent of children living in poverty above the poverty line.
This includes cutting black child poverty by 52 per cent, Hispanic child poverty by 45 per cent and Native American child poverty by 62 per cent.
The IRS says that for the tax year 2021, "families claiming the CTC will receive up to $3,000 per qualifying child between the ages of 6 and 17 at the end of 2021".
They will receive $3,600 per qualifying child under age six at the end of 2021.
Under the prior law, the amount of the CTC was up to $2,000 per qualifying child under the age of 17 at the end of the year.
The increased amounts are reduced (phased out), for incomes over $150,000 for married taxpayers filing a joint return and qualifying widows or widowers, $112,500 for heads of household, and $75,000 for all other taxpayers.
Advance payments of the 2021 Child Tax Credit will be made regularly from July through to December to eligible taxpayers who have a main home in the US for more than half the year.
The total of the advance payments will be up to 50 per cent of the Child Tax Credit.
Advance payments will be estimated from information included in eligible taxpayers' 2020 tax returns – or their 2019 returns if the 2020 returns are not filed and processed yet.
New Mexico state Rep. Javier Martinez, a Democrat from Albuquerque, called the CTC a philosophical shift from mid-20th century programs like Medicaid and food stamps.
The smaller monthly boosts, he said, were more likely to be incorporated into the household budget and create certainty in a family.
The expanded CTC expires in 2022 – but Biden has proposed extending it through until 2025.
Whether that happens may depend on whether advocates can demonstrate a positive impact and whether opponents, primarily Republicans, find evidence of waste.
The IRS has urged people with children to file their 2020 tax returns as soon as possible.
This will make sure they're eligible for the right amount of the CTC as well as any other tax credits they're eligible for, including the Earned Income Tax Credit (EITC).
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