Families across the United States are due to receive the first installment of the expanded child tax credit payments from the Internal Revenue Service (IRS). Beginning July 15, 2021, the first of six monthly payments will arrive in the mail for parents who can claim the benefits.
CNET reported that parents should have received two letters from the IRS. The first letter, sent out in early June 2021, notifies parents of their eligibility based on their filed tax returns from 2019 or 2020.
The second IRS letter details the amount parents may expect to receive every month beginning July 15, which could round up to $250 or $300 per child per month. In total, parents may get a maximum of $3,600 in tax credits per child below 6 years old, while those with older children until 17 years old may receive $3,000 per child.
Other Eligibility Issues
On the other hand, parents with college students between the ages of 18 to 24 will get $500 as a one-time payment as the children are still considered dependents.
However, under this scheme, taxpayers who earn above $95,000 for the determined financial year will not be able to make claims for this expanded child tax credit. They will continue to receive the existing benefit of $2,000 per child.
Parents who are still unsure if they qualify for this benefit may refer to the recently launched IRS computation tools -- Child Tax Credit Eligibility Assistant. They will need to input basic information about themselves, their income and their qualified children. Consequently, parents may also make changes at the IRS portal if they prefer to receive the credit in lumpsum when filing for the 2021 tax returns next year.
On the other hand, non-filers may still be eligible for child tax credit payments if they have children and should receive IRS notices as well. They can also update their records on the government portal.
However, the IRS has no issued guidelines on the claims for divorced or separated parents. Instead, the IRS will use the most recent tax return on file and whichever parent has the record will receive the payments. In most cases, divorced parents agree to alternate the years they could file the claims and this will be applied in this expanded scheme. A parent may also chose to opt out of the scheme to allow the other to file the claim.
Differences Between Old & New Child Tax Credit Scheme
This expanded benefit is larger than the 2020 scheme and covers older dependent children. It's also fully refundable. The government ensured that poor families in America may get the full benefits of the expanded scheme that could be seen as a cash benefit to help children, rather than a tax burden. This scheme will expire after one year but reports cited President Joe Biden might consider an extension until 2025.
Related Article: Expanded Child Tax Credit Includes Babies Born or Adopted This
In line with this rollout, Vice President Kamala Harris has been promoting the program in partnership with different church and educational organizations. Harris said that more people, especially the impoverished, should be aware of how they can claim this benefit.
To learn more about the 2021 child tax credit payments, visit the government portal.
