Are you eligible for the child tax credit?
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(CNN) -
Tens of millions of families received the first payment of the expanded child tax credit, the Internal Revenue Service (IRS) and the U.S. Department of the Treasury said Wednesday night. Additional funds each month, through the end of 2021, along with a tax break, next year.
The payments were approved as part of the $ 1.9 trillion Democratic stimulus package, which President Joe Biden signed into law in March.
The first installment totaled $ 15 billion.
The contributions may offer the greatest benefit to low-income families, cutting child poverty by nearly half, but the extra money will also go to wealthier American families.
Here are four things to know about the extended child tax credit:
Who qualifies?
The full enhanced credit will be available to heads of households earning up to $ 112,500 per year and joint taxpayers earning up to $ 150,000 per year, after which it begins to phase out.
For many families, the credit then stabilizes at $ 2,000 per child and begins to be phased out for single parents earning more than $ 200,000 or for married couples with incomes greater than $ 400,000.
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More low-income parents will also be eligible for the child tax credit because the aid package makes it fully refundable.
It had only been partially repayable, leaving more than 26 million children unable to obtain full credit because their family income was too low, according to Treasury Department estimates.
Non-citizen parents can receive payments for their citizen children as long as they have individual taxpayer identification numbers (ITINs) and their children have Social Security numbers.
Families can verify their eligibility through this IRS website.
However, the extended credit is only in effect for 2021, although Democrats hope to extend it.
New child tax credit payments begin this week.
The IRS wants to make sure needy families don't miss out
How much will I receive?
That depends on your household income and the size of your family.
Eligible families can receive a total of up to $ 3,600 for each child under the age of 6 and up to $ 3,000 for each age 6 to 17 by 2021. That's an increase in the regular child tax credit of up to $ 2,000 for each child up to 17 years of age.
When will I see the money?
Parents will receive half of their credit - up to $ 300 per month for each child under 6 and up to $ 250 for each child ages 6 to 17, monthly from now until the rest of the year.
Payments will be made on the 15th of each month, unless it is a weekend or holiday.
They can claim the other half when they file their 2021 taxes next year.
Parents can check to see if they are signed up to receive advance payments on an IRS portal.
They can also use it to provide or update their bank account information, which will take effect from the August payment.
Those who don't receive their monthly payments until later in the year will receive half the credit in 2021.
Families who wish to receive payment as a lump sum can choose not to participate in the monthly fees on the portal.
Do I have to do something to get it?
The vast majority of families, approximately 39 million households that cover 88% of the children, will automatically obtain the credit because they have filed 2019 or 2020 returns claiming the credit.
The IRS will also send payments to Americans who previously used its non-taxpayer portal to register for stimulus checks.
The payments have already been sent to more than 35 million families, while about a million have chosen to take the funds as a lump sum, an administration official said Wednesday.
The others have requested extensions or have problems with their returns.
Parents of nearly 60 million children will receive monthly payments through direct deposit, paper checks or debit cards, according to the agency.
About 86% of payments will be sent via direct deposit.
Americans are saving their stimulus check money ... instead of spending it
But families who have not recently filed tax returns or who have not used the non-taxpayer tool should take action.
They can use another IRS portal to register and receive the enhanced child tax credit.
The registration tool allows users to provide the necessary information about their homes and, if they wish, their bank accounts so that the agency can deposit the funds directly.
Families of more than 720,000 minors who signed up to receive stimulus checks last year will receive payments from the child tax credit, the Treasury estimates.
In early August, the IRS is scheduled to allow parents to update their mailing address, and later in the summer - boreal - the agency will allow families to update their income and marital status, as well as the number of dependents, which It is important to anyone with babies born in 2021.
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