Are you eligible for the child tax credit?
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(CNN) -
Families of more than 65 million children will begin receiving monthly payments from the new and improved child tax credit stimulus of up to $ 300 on July 15, the Joe Biden administration announced Monday.
The temporary benefit, which will go to 39 million households and covers 88% of children in the United States, comes from the Democrats' $ 1.9 trillion coronavirus rescue package.
The vast majority of families will receive funds by direct deposit, while the remainder will receive checks or debit cards in the mail.
Also, the Internal Revenue Service (IRS) will send payments on the 15th of each month, unless it falls on a holiday or weekend, through December.
How much will I get for the new child tax credit stimulus?
Eligible parents will receive US $ 300 per month for each child under the age of 6 and US $ 250 for each child between the ages of 6 and 17.
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Additionally, payments will be based on taxpayers' 2020 tax returns, or their 2019 returns if 2020 returns are not yet filed and processed.
To reach low-income households that don't often file taxes, the IRS sets up a website for them to submit their information.
This will allow them to apply for both the child tax incentive and the stimulus payments they may have missed.
New Websites
A similar online form existed last year for low-income Americans to receive the first round of stimulus checks from the March 2020 aid package.
In the meantime, the IRS will also launch another web portal to allow parents to update their address, bank account information, and family size, as well as opt out of monthly payments in exchange for receiving the tax incentive as a total sum next year when they file their return.
If a family's situation changes during the year, the IRS can adjust the payment when they file their 2021 tax return to claim the second half of the stimulus.
On the other hand, low-income taxpayers will not have to repay any type of overpayment, said a senior government official.
More details about the websites will be announced in the coming weeks, the official said.
The government also plans to launch an outreach campaign to inform families about payments and portals.
2021 Child Tax Credit: What You Need to Know About New Supports Beginning July 15 in the US
Improvements in the new credit stimulus
With the American Rescue Plan, families can receive in 2021 a stimulus of US $ 3,600 for each child under 6 years of age and US $ 3,000 for each child under 18 years of age.
This represents an increase in the current stimulus of up to US $ 2,000 for each child under 17 years of age.
The credit stimulus enhancement will be available to single parents with annual incomes of up to $ 75,000, for heads of households earning $ 112,500 and for joint taxpayers earning up to $ 150,000 a year.
The package also makes the fiscal stimulus fully refundable so that more low-income parents can take advantage of it.
Until now, it was only partially reimbursable, leaving more than 20 million children unable to get the full stimulus because their families' income was too low.
In this sense, the legislators also wanted to make it easier for parents to use the funds to cover their expenses during the year.
Therefore, the law provides that families receive half of the stimulus on a monthly basis, from July to December.
They will then be able to claim the other half on their 2021 tax return.
Saving or shopping, what do you use stimulus checks for?
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IRS and pressure from Democrats
Initially, the IRS wasn't sure if it could provide the stimulus on a monthly basis starting in July, but Commissioner Charles Rettig told lawmakers last month that the agency was on track to meet that deadline.
The improvement in the fiscal stimulus for children is expected to reduce child poverty by almost half.
In total, the Democrats' aid package is expected to cut the proportion of children in poverty by more than half, lifting more than 5 million children out of poverty this year.
Democratic lawmakers have lobbied the Biden administration to make this new stimulus permanent, but President Joe Biden's latest proposal, the American Family Plan, would only keep the increase in payments until 2025. The plan would make the stimulus fully reimbursable. permanently.
The measure is expected to cost about $ 110 billion a year.
CNN's Donald Judd contributed to this report.
Credit Encouragement Children
