The IRS confirmed Wednesday it will start sendingstarting in July. This new way of receiving the credit is due to plan that increased the total amount could receive to $3,600 per (you can ) to go along with the and .
IRS Commissioner Charles Rettig said in a hearing in front of the Senate Finance Committee on Tuesday that the IRS will be ready to deliver monthly payments for the child tax credit starting in July.
“We are,” Rettig told Sen. Sherrod Brown, a Democrat from Ohio, when asked if the child tax credit monthly payments will start in July during the senate committee. “If we end up not being on track for some unforeseen situation, we’ll advise you and the committee.”
Under thefamilies who qualify could receive $3,600 for children age five and under or $3,000 for children under the age of 17. The total amount will be split: half coming with a families’ tax return while the other half will be divided into monthly payments from July to December.
We’ll tell you everything you need to know about the new CTC, including how much money you could get and whether the benefit will become permanent. Plus, here’s, from new health care to insurance. Additionally, if you haven’t received your yet, here’s . This story has been updated.
Find out how much you could get with the new child tax credit
The new child tax credit could potentially bring your family more money this year,. Fortunately, you don’t have to do the math yourself to find out how much money you can expect. Using our , you can enter your filing status, and the number of children you’re claiming. Note that the calculator doesn’t store any information you input.
What is the child tax credit and how does it work?
At a basic level, the CTC is a credit that parents and caregivers can claim to help reduce their , depending on the number and ages of their dependents. For many, it may provide a much-needed source of relief as part of a .
Previously, the CTC was a $2,000 credit parents could claim on their taxes for every child under the age of 17 (the same age range for that was used for the first and second ). And if that credit exceeded the amount of , parents could still receive up to $1,400 of the balance as a refund; this is technically referred to as the additional child tax credit or refundable CTC. For example, a married couple with children ages 5, 10 and 12 would receive a total credit of $6,000 — unless they were , in which case they’d receive $4,200.
When will I receive the child tax credit money?
This part isn’t yet clear, with the IRS saying it’s still working on the details. We know that payments will occur “periodically,” but the IRS may not be able to commit to monthly disbursements. We also know that half the payment could come in 2022. Here are more details about, with a potential payment timeline.
What did the stimulus bill change to the child tax credit for 2021?
will temporarily give more money to families. Here’s everything that changes:
- Credits increase from $2,000 to $3,600 per child under 6 and $3,000 for children older than 6.
- The credit would also be fully refundable.
- Money from the credit will be split: Half will be paid through the tax refund in 2022 and the other half will be paid monthly from July to December.
- There is no $2,500 earnings floor.
- Families in Puerto Rico can receive the credit.
Here are more details on.
Do I qualify for the child tax credit?
Families with kids under 6 will receive up to $3,600 per child under the new. Families with children aged 17 and under will receive a credit of $3,000 per child. Families with older kids are also eligible: You can claim $500 for each child aged 17 and 18, or for full-time college students between the ages of 19 and 24.
The tax credit applies to children who are considered related to you and reside with you for at least six months out of the year.
Note that though the eligibility requirements are relatively broad, higher-income families may receive a reduced credit. But married couples filing jointly with an adjusted gross income under $400,000 are eligible for the full amount, as are individuals with anunder $200,000.
Under the new plan, the amount of the larger credit will start to phase out for single people earning more than $75,000 a year, heads of household earning more than $112,500 a year and married couples earning more than $150,000 a year. Here are.
What if I share custody of a dependent?
Parents who share custody will not be able to both claim the 2021 child tax credit. Here are more details about a.
Will the new CTC be based on my 2019 or 2020 tax return?
It will likely depend. The IRS will be tasked with basing your eligibility for the CTC on your, if that’s been processed by the first July payment. Otherwise — in the case of a , for example — the agency would use your 2019 taxes to determine the amount you’re owed.
How long will the new credit last? Will it be permanent?
The CTC for 2021 is considered a temporary reprieve for the year and would last only through 2021. Any changes to a 2022 CTC would need to take place in a separate bill.
For more information, here’s, when the and how to . Here is also how to and what we know about using .