How Much Child Tax Credit Should You Receive Starting July 15th?

IRS Announces American Rescue Plan Raises Child Tax Credit For 2021, Largest Ever

DID YOU GET A LETTER FROM THE IRS?

Oh my – a letter from the IRS! That has to be bad news, right? Perhaps an audit notice? Well, not in this situation! 36 million families will be receiving a letter from the IRS explaining the new child tax credit provisions for 2021 under the American Rescue Plan. It is predicted that 92% of households with kids will qualify for direct financial aid. For those with children, the American Rescue Plan  increased the Child Tax Credit  from $2,000 per child to $3,000 per child for children over the age of six and from $2,000 to $3,600 for children under the age of six, and raised the age limit from 16 to 17. All working families will get the full credit if they make up to $150,000 for a couple or $112,500 for a family with a single parent (also called Head of Household).

INFO DIRECT FROM THE IRS WEBSITE:

“Important changes to the Child Tax Credit will help many families get advance payments of the credit starting this summer. The IRS will pay half the total credit amount in advance monthly payments beginning July 15. You will claim the other half when you file your 2021 income tax return. These changes apply to tax year 2021 only.

To qualify for advance Child Tax Credit payments, you — and your spouse, if you filed a joint return — must have:

• 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: Enter Payment Info Here tool; and
• 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.

We’ll use information you provided earlier to determine if you qualify and automatically enroll you for advance payments. You do not need to take any additional action to get advance payments.”

WHAT DO I DO IF I AM A NON-FILER?

Here is a direct link to the tool to register to receive the credits if you did not file with the IRS in 2019 or 2020 from the IRS website:

• Child Tax Credit Non-filer Sign-up Tool | Internal Revenue Service (irs.gov)

HOW MUCH SHOULD I EXPECT TO RECEIVE MONTHLY?

Here is a link to a tool from Kiplinger Magazine which helps calculate what amount you are entitled to receive.

• 2021 Child Tax Credit Calculator

DO YOU HAVE OTHER QUESTIONS ABOUT THE NEW TAX CREDIT?

Here is the link to the IRS website’s FAQ page:

• 2021 Child Tax Credit and Advance Child Tax Credit Payments Frequently Asked Questions

Here is the link from the White House answering more questions.

• Child Tax Credit for Non-Filers | The White House

CONCLUSION:

The Child Tax Credit provision in the American Rescue Plan provides the largest Child Tax Credit ever and historic relief to the most working families ever. This added aid should make things a little easier for families who took a financial hit during the COVID-19 pandemic.

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