If you are eligible for the child tax credit, there is some good news for you. You could start getting the check within months. But you need to know the key points.
The stimulus checks have been going out at a fast pace and over 37M are slated to go out this week alone. This $1,400 check is the immediate way that the IRS is using to send out relief to the Americans to tide over the economic crisis brought about by the COVID-19 pandemic. But for many Americans, the biggest check could be from the revamped Child Tax Credit of 2021.
The inclusion of dependents of all age groups to the definition of dependents in the third stimulus payment has increased the payout that many families have received. But a larger bounty could come from the expansion in the Child Tax Credit. The increase could claim as much as $3,600 per child dependent. But the exact amount is subject to certain qualifications. That is way above the $2,000 that families could claim for every dependent below 17 in the previous year.
But a few questions have yet to be cleared and need answering. Important among them is when exactly the Child Tax Credit checks will start going out to the people? Also, we need clarity on how frequently a would person get the Child Tax Credit check. You will also get clarity on 7 tax credits for 2021. There is also further information about benefits for the unemployed. More significant, is a fourth stimulus payment under consideration by the government.
Details Of The Child Tax Credit Payment
The new Rescue Plan has stipulated/ that you should be getting your Child Tax Credit checks by July. But we are yet to get an exact date. We will get to know more details under the expanded plan from the IRS soon, the authorities have let out.
What Do You Have To Do To Get The Child Tax Credit Check?
No. the IRS has specifically instructed Americans to not file any amended returns linked to the latest legislation. Any further steps are quite unnecessary at this stage, it said in a statement released on March 12.
Charles Retting, the IRS commissioner has said that if you have filed your tax return by the 17th of May, you will get your Child Tax Credit check automatically. But non-filers will have to file returns for 2020 if they are to claim this payment through a tax credit.
Will You Be Getting It More Than Once?
‘Periodically’ is the keyword here. That is the duration or frequency with which you can expect your Child Tax Credit check. The transcript of the bill elaborates that it is to be paid out from July 2021 through December. But the authorities are yet to settle on the frequency with which it is going to send the checks, and if it could be done as often as once every month.
Rettig could not commit to a July deadline for the first Child Tax Credit check and said that there was the possibility that the time frame would change. He reassured Americans that the authorities were focused on their goal. He said it would be a tough task to start sending out a check every month.
But what is clear though is that the amount is expected to be 50% of what is to be sent out for the whole year, as calculated under the new stimulus bill. You can only expect the rest after you have filed your 2021 return at the beginning of next year.
Simple back of the envelope calculations will tell you that the monthly payout should work out to $300 every month for each qualifying child under 5 years. The corresponding amount for every child from 6 to 17 years is $250. The Child Tax Credit will rapidly phase out for individuals and families with a rise in income.
The income figures as calculated through AGI ( Adjusted Gross Income) are as follows. Single people bringing in below $75,000 should get the whole check. It will phase out if the earnings cross $80,000. The corresponding figures for heads of household are $112,500 and $120,000 and for married households that file jointly, the amounts are $150,000 and $160,000.
How Will You Receive Your Child Tax Credit Check?
The payments are expected to be delivered directly into banks as they have done for the stimulus check of $1,400. This was reported by Joanna Powell of CBIZ.
The IRS is yet to confirm the news. If the method remains identical to what has been used to send out the third stimulus check, you could receive an early check if your account details are already with the tax authorities. Or you would have to wait for the paper check to come in through the US Postal Service.
Can The IRS Portal Help You Fix Any Slip-Up?
The IRS will create a portal to enable advance credit. The online portal is expected to be launched by the 1st of July this year. But the shortage of resources could delay the process as the last date of filing of taxes is only May 17.
Once the Child Tax Credit portal goes online, people can log in and update their details. For instance, if you had a child in 2021, you would need to enter those details so that the IRS can act on it.
Would You Need To Return Any Money?
The rules are a little different than for the third stimulus check. While calculating Child Tax Credit payments, you would have to refund any payment that has been accidentally credited to your account. If it is revealed that you were paid in excess when you file the return next year, you will have to refund the excess amount.
You will need to make sure that this does not happen. Update all your details in advance and double-check every piece of information before uploading it to the system. To help in this issue the IRS will open the portal much before time so that you can conveniently carry out all the necessary adjustments.
You will not be getting all your Child Tax Credit checks in July. But you could opt for a total adjustment in the spring of 2022 as accredited for your tax return of 2021.
What Next After The Child Tax Credit Payment?
Though the Child Tax Credit payment is programmed to end in December 2021, the President has expressed his desire to make the advanced rate of payments permanent. There is an ongoing discussion regarding that in the Congress, said Jen Psaki, the White House Press Secretary on Tuesday. The citizens wait to see what comes out of the discussion as the expectations mount from the government in power.