If you’re finding yourself excited, yet confused, about the Child Tax Credit, you aren’t alone. However, if you are wondering if it’s really happening, the good news is yes it is (and it’s about time.)
It’s kind of like Christmas is starting in July for many people because on the 15th, the enhanced child tax credit will start. This is just a piece of the American Rescue Plan that President Joe Biden signed earlier this year.
So what does this mean for your family, and do you qualify? Let’s break it down:
The old child tax credits gives families $2000 a year per each dependent 17 and younger. The new plan bumps it up to $3000 for each dependent, and also adds an additional $600 per year for each child you have that’s under the age of six.
Who gets this (much-needed) money? CNBC reports, “The full credit is available to all eligible children in families with 2020 or 2019 adjusted gross income of less than $75,000 for single parents and $150,000 for a married couple filing jointly. The full enhanced credit ends for individuals earning $95,000 and married couples filing jointly making $170,000, though they’d still be eligible for the regular child tax credit, meaning they’d get lower monthly payments starting in July.”
According to the IRS, the following are the qualifications needed to get your tax credit early: “If you filed a 2019 or 2020 tax return and claimed the Child Tax Credit on the return; or given us your information in 2020 to receive the Economic Impact Payment using the Non-Filers. You have had a main home in the United States for more than half the year (the 50 states and the District of Columbia) or file a joint return with a spouse who has a main home in the United States for more than half the year; and a qualifying child who is under age 18 at the end of 2021 and who has a valid Social Security number; and made less than certain income limits.”
Basically, those who are eligible will not have to wait until their 2021 taxes are complete to start reaping the benefits. Families will start receiving half of these advanced payments in a few short weeks, and can expect them to last until December, 2021.
“For children between 6 and 17, the full credit will amount to $250 per month. For children under the age of 6, the full credit will be $300 per month,” reports CNBC.
This is your money, and not something you will have to pay back. The beauty of this tax credit isn’t only that it’s been increased; you can get it earlier in these installments instead of one big chunk — something many families need very much right now.
How will you get these payments? If you filed a 2019 or 2020 tax return, and you qualify and don’t need to do anything else. 80% of those eligible will start getting their payments through direct deposit. If the IRS does not have your direct deposit information, watch your mail for a paper check, or a debit card.
The IRS says,”future payments will be made on the 15th of each month, unless the 15th falls on a weekend or holiday, at which point the money will be sent on the closest business day.”
After you file for your 2021 taxes, you will get the other half of the enhanced child tax credit.
This is an important first in universal basic income for parents — something we need to continue, and this is why: The enhanced child credit will help 88% of American families with children. It will also help get over four million children out of poverty, and be a huge help to those families who are just barely getting by.
President Biden has proposed to make this child tax credit continue until 2025, while some lawmakers would like to make it permanent.
Can I get a hell yeah?
As someone who had three children and stayed home with them not only because I wanted to, but because day care would have been astronomical if I didn’t, I am all for this to be a permanent thing even though my kids won’t be dependents much longer.
It will help my kids when they have families of their own not have to struggle so hard to make ends meet, and offer a cushion during hard times.
So, let’s collectively celebrate.
And, if you still aren’t sure how much you can expect to get, head here — and this calculator will do the work for you.
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