Child Tax Credits – The American Rescue Plan
The #AmericanRescuePlan includes a Child Tax Credit that will benefit millions of Americans:
$3,000 tax credit per child for children 6 and over
$3,600 tax credit per child for children under 6 years old.
Included below is a helpful Q&A regarding the child tax credits https://www.10tv.com/…/507-e42f37c3-39c6-4665-9d7e…
How much is the child tax credit?
It’s $3,600 for each child under age 6. That breaks down to $300 per month. For children ages 6-17, it’s $3,000 or $250 per month. Children who turn 17 in 2021 are among those who qualify.
When do child tax credit payments start?
July 15 is when the monthly payments begin. They will continue through December. Because this is starting in the middle of the year, only half the money will come via monthly payments. The rest will come after taxes as part of the refund next spring, or will be deducted if the taxpayer owes the IRS.
When will the monthly child tax credit payment arrive?
The IRS says the payments will be made on the 15th of each month unless it falls on a weekend or holiday. Payments will arrive either by direct deposit or in the mail as a paper check or debit card.
Do I have to take the monthly child tax credit payment?
No. The IRS says it will have an online portal set up starting July 1 where taxpayers can opt-out of the monthly payment and take it all in one lump sum in the spring of 2021.
Is it better to take the monthly child tax credit or the lump sum?
It depends on your financial situation. One reason there was a push for the monthly payment was to help cut childhood poverty. Parents who have a lower income and are struggling could use the money immediately on food, diapers, clothing, child care or whatever is needed at the moment.
If you’re someone who doesn’t need the money immediately, or who anticipates possibly having to pay taxes to the IRS in the spring, you could opt-out and know that the full amount will be available at tax time.
Do I get the child tax credit advance if I had a child this year?
The IRS says the online portal will include the ability to report having added a child in 2021. It will also allow taxpayers to update their income and filing status.
Will the monthly child tax credit continue in 2022?
The increased and monthly child tax credit from the American Rescue Plan is only good for 2021 and is not set to continue in 2022. But in President Joe Biden’s American Families Plan, he is proposing extending it to 2025. Some members of Congress have called to make it permanent.
You can find a calculator for estimated childcare tax credits that you could be eligible for here: https://www.kiplinger.com/taxes/602431/child-tax-credit-2021-who-gets-3600-will-i-get-monthly-payments-and-other-faqs?fbclid=IwAR3wFIVqRAWdtqXKk355Rl9svp-Z7U4KWcqFPB4Y-Su3M_-Yd2kkA3_XGkw