IRS notifies families eligible for child tax credit of up to $ 3,600 by mail

By Carmen Reinicke - CNBC + Acorns

The Internal Revenue Service (IRS) announced that it has begun mailing letters to more than 36 million families in the United States who may be eligible for the monthly child tax credit.

The new tax credit will provide a benefit of $ 3,600 for children under the age of 6 and $ 3,000 for children between the ages of 6 and 13 for fiscal year 2021.

Half of the amount established in the US rescue plan for the coronavirus pandemic will be sent to most families in monthly payments from July 15 until December.

In general, the monthly amounts will be $ 300 for each child under the age of 6 and $ 250 for each child between the ages of 6 and 17.

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Families will be able to claim the remaining half of the credit by filing their

2021

income tax return

, in 2022.  

The IRS is sending the letters to families who might be eligible based on the information they submitted to the agency for their 2020 income tax return, or in 2019, if they did not report anything last year.

[The richest people on the planet pay very little (or no) taxes to the IRS]

There is good news for families who have updated their tax returns and are eligible for the tax credit: they do not have to take any additional action to receive the monthly amounts, they just have to wait.

But it is important that families who have not filed their income tax returns with the IRS do so or as soon as possible, so that the agency can determine if they are eligible and send them their monthly payment.

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According to the IRS, 80% of families will receive payments through direct deposit, identical to the way they received the COVID-19 stimulus checks.

Other families will receive checks or a debit card in the mail.   

The IRS will continue to offer tools and resources over the next several months to educate families about these benefits, including a way for families to choose to receive a lump sum when they file their taxes in 2021 instead of monthly payments.

This article is part of the Invest in You Ready series.

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