The Internal Revenue Service (IRS) is set to disburse the first checks for expanded Child Tax Credit assistance under the “American Recovery Plan” under the Biden Administration beginning next July.
Half of the funds for the extension of the “Child Tax Credit” under the Biden Administration’s “American Rescue Plan” that provides for monthly payments of between $200 and $350 will be sent between July and December of this year, with the remaining amount to be claimed next year at tax season.
The Internal Revenue Service (IRS) confirmed that it would be starting to issue the Child Tax Credit (CTC) extension payments beginning in July.
However, the provisions set forth in the stimulus law provide for the IRS to carry out the distribution process consecutively effective until the end of the year with the first of seven mailings in that month.
The applicable monthly amount will depend on the applicant’s income.
The extension of the credit increases the amount of money a parent can claim per child from $2,000 to $3,600. Children 5 years old or younger could receive the maximum available for the credit following the change in the tax law. Parents of children between the ages of 6 and 17 could be credited with a maximum of $3,000.
Parents of dependents ages 18 to 24, many of whom are college students, would receive a single $500 payment.
The report this week from CNET indicates that parents of newborns this year would also receive the funds if they include the new dependent’s information on the current tax return to receive payments this year. Otherwise, parents will have to file during the next tax season.
If your child will be turning 6 by the end of the year, you would be eligible to receive $3,000 for the child. If you have a teenager age 17 who will turn 18 by the end of 2021, you will receive $500 total for that dependent.
It is important that, if you do not usually file taxes but may be eligible for this monthly child incentive, you file your tax information with the IRS this year.
IRS Commissioner Charles Rettig said the payments will be automatic for eligible individuals who file taxes through May 17.
Eligibility by income level
The full credit applies to individuals with children and adjusted gross income of $75,000 or less; $150,000 or less for couples; and $112,500 for single mothers or heads of household.
The phase-out or funding for the credit begins to be reduced for individuals reporting higher incomes than the above.
The credit will be reduced by $50 for each additional $1,000 of earned adjusted gross income.
Other requirements to receive the “Child Tax Credit” in advance
– The child for whom you are claiming the credit must have lived with you for at least six months of the year.
– You and the child must both be U.S. citizens
– For couples filing jointly, at least one spouse must have a Social Security number.
– The child must also have a Social Security number, and this applies to adoptees.
– In cases of joint custodial parents, only one party can claim the credit.