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What You Need to Know About the Monthly Child Credit Coming in July 15

2021-06-20T07:16:02.907Z


The monthly payments of the tax credit will benefit about 65 million children in the States. Who qualifies? Is it necessary to do something to receive them? By what means will they be received and on what dates?


By Carmen Reinicke - CNBC + Acorns

Monthly child tax credit payments will begin to be sent out in a few weeks to eligible households across the United States and will benefit about 65 million children, according to the Internal Revenue Service (IRS).

The expanded child tax credit was included within the American Rescue Plan approved in March in the context of the COVID-19 pandemic.

In 2021, the maximum tax credit per child is $ 3,600 for children under the age of 6 and $ 3,000 for those between the ages of 6 and 17.

This expanded credit, which is a form of advance on 2021 taxes, will be distributed in monthly installments.

Households eligible for full payments will receive $ 300 per month for each child under the age of 6 and $ 250 for those between the ages of 6 and 17.

This is everything families need to know before payments start on July 15th.

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Who qualifies for the maximum credit?

Most American families qualify for at least some amount of money.

The full credit can be received by married couples who file taxes together and have children and adjusted gross income less than $ 150,000, or $ 75,000 if they file taxes individually.

The tax credit will be gradually less for taxpayers who earn more.

People earning over $ 95,000 per individual and $ 170,000 per married couple are not eligible.

This should be done if you were unable to file your taxes this Monday, May 17, the deadline to do so

May 17, 202100: 18

Taxpayers who earn more than that will be eligible for the regular child tax credit, which is $ 2,000 per child under 17 for parents earning less than $ 200,000 a year, or $ 400,000 for married couples.

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Do I need to do anything to receive payments?

Most eligible families don't have to do anything at this time, according to the IRS.

The agency will use 2020 tax returns to determine your eligibility, or 2019 returns for those who have not filed taxes in the past year.

In early June, the IRS began sending 36 million letters to families informing them that many of them are eligible for the credit and monthly payments.

[Where you can earn extra money working from home]

Those families that traditionally do not file taxes because they do not have sufficient income, but have children in their household who are eligible, can now claim the benefit.

On June 14, the IRS opened a portal for these non-filers to register and receive the new credit.

If a particular family had any changes in the last year, that may mean they are eligible for a higher payment.

If you need to change where your payments are sent, the IRS will open another portal in June for people to update that information.

Possible changes include the birth of a baby, a change in income, or the need for payment to go to a different parent than the one who got the benefit in 2020.

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How will the payments be sent?

As with the stimulus checks sent by the IRS earlier this year and in 2020, most of the monthly payments of the child tax credit will be sent by direct deposit.

About 80% of eligible people will receive the money this way, according to the agency.

If the IRS has your direct deposit information from your tax return, you will likely receive the monthly credit that way.

If not, the IRS will also send paper checks to some families.

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On what date will the payments be sent each month?

The IRS said payments will be made on the 15th of each month, unless the 15th is a weekend or holiday.

In that case, the money will be sent the next business day.

After the benefit is shipped for the first time on July 15, families can expect the next payment on August 13, September 15, October 15, November 15, and December 15.

These are the requirements to receive aid checks of up to $ 300 for each child

May 17, 202101: 51

So far, monthly payments are only scheduled to continue through the end of 2021. Families will receive the second half of the credit when they file their 2021 taxes in 2022. But that could change: President Joe Biden suggested that the extended credit be available through 2025, and several Democratic lawmakers want it to become a permanent benefit.

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Can payments be declined?

What if someone decides to do it?

Families can choose not to receive monthly credit payments through an IRS portal that will be enabled in June.

Those who do will not receive the monthly payments, but they will receive the full credit for which they are eligible when they file their 2021 taxes.

Some families may choose this system if they don't need monthly payments right away or prefer to receive a larger amount of their tax refund, said Elaine Maag, senior associate researcher at the Urban-Brookings Tax Policy Center.

"There is evidence to show that some people really like to get that bigger refund and use it to buy a large household item like a refrigerator or put together the first and last month's rent so they can move out," he said.

To calculate how much money you should receive, the personal finance website Grow created a calculator that takes into account your marital status, annual income and the number of dependents.

This article is part of the Invest in You Ready series. Set. Grow (Invest in you: Ready. Done. Grow), an initiative of CNBC and Acorns, the microinvestment app. NBC Universal and Comcast Ventures are Acorns investors.

Source: telemundo

All news articles on 2021-06-20

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